Under the Weather
Benjamin Jones & Benjamin Olken
NBER Working Paper, January 2010
Abstract:
This paper uses international trade data to examine the effects of climate shocks on economic activity. We examine panel models relating the annual growth rate of a country's exports in a particular product category to the country's weather in that year. We find that a poor country being 1 degree Celsius warmer in a given year reduces the growth rate of that country's exports by between 2.0 and 5.7 percentage points, with no detectable effects in rich countries. We find negative effects of temperature on exports of both agricultural products and light manufacturing products, with little apparent effects on heavy industry or raw materials. The results confirm large negative effects of temperature on poor countries' economies and suggest that temperature affects a much wider range of economic activity than conventionally thought.
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Externalities from Recycling Laws: Evidence from Crime Rates
Bevin Ashenmiller
American Law and Economics Review, forthcoming
Abstract:
This paper tests whether laws that encourage bottle recycling and also increase the labor incomes of low-wage workers have the additional effect of reducing petty crime rates. A simple choice theory model of crime participation and labor supply suggests that low-wage workers may substitute time and effort away from illegal activity to legal and remunerative recycling activity. Between 1973 and 2001, eleven states and one city enacted bottle recycling laws, and this paper exploits the variation in the year of implementation of the bottle laws to measure and test for any reduction in crime rates. The results show that city-level petty crime rates in bottle law states are on average 11% lower than city-level petty crime rates in non-bottle law states. Although the primary positive benefits of recycling income go to low-income individuals, the unexpected secondary benefit of lower crime rates affects both high- and low-income individuals.
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What Doesn't Kill you Makes you Weaker: Prenatal Pollution Exposure and Later Educational Outcomes
Nicholas Sanders
University of California Working Paper, November 2009
Abstract:
I examine the impact of prenatal particulate pollution on later educational achievement. I use ambient total suspended particulates (TSPs) as a measure of particulate exposure and standardized test scores of exposed individuals as a measure of educational achievement. I focus on individuals born between 1978 and 1984 to exploit the shock of the industrial recession of the early 1980s. To overcome measurement error and potential omitted variables bias, I employ an instrumental variables strategy. I use a manufacturing employment-based shift-share instrument for pollution exposure in the year of birth. Counties with larger relative pre-recession manufacturing employment sectors saw greater decreases in ambient TSPs, providing a source of exogenous variation in pollution levels. This variation helps me separate the causal effects of pollution reduction from general time trends. Ordinary least squares results suggest a negative relationship between ambient TSPs and test scores and are statistically significant, though small. Instrumental variables results are statistically significant and suggest that a within-county standard deviation decrease in ambient TSPs is associated with 5-10% of a within-county standard deviation increase in test scores. This implies that approximately 20% of the score gains seen by the 1978-1984 birth cohorts in my sample is attributable to the reduction in ambient TSPs. My results are robust to the inclusion of school fixed effects, year-of-birth and year-of-test fixed effects, and demographic and economic covariates.
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Keeping warming within the 2°C limit after Copenhagen
Andrew Macintosh
Energy Policy, forthcoming
Abstract:
The object of the United Nations Climate Change Conference in Copenhagen in December 2009 was to reach an agreement on a new international legal architecture for addressing anthropogenic climate change post-2012. It failed in this endeavour, producing a political agreement in the form of the Copenhagen Accord. The Accord sets an ambitious goal of holding the increase in the global average surface temperature to below 2 °C. This paper describes 45 CO2-only mitigation scenarios that provide an indication of what would need to be done to stay within the 2 °C limit if the international climate negotiations stay on their current path. The results suggest that if developed countries adopt a combined target for 2020 of ?20% below 1990 levels, global CO2 emissions would probably have to be reduced by ?5%/yr, and possibly ?10%/yr, post-2030 (after a decade transitional period) in order to keep warming to 2 °C. If aggressive abatement commitments for 2020 are not forthcoming from all the major emitting countries, the likelihood of warming being kept within the 2 °C limit is diminutive.
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The Incidence of Hybrid Automobile Tax Preferences
Andrew Chupp, Katie Myles & Frank Stephenson
Public Finance Review, January 2010, Pages 120-133
Abstract:
We use national and California price data from January, 2002 to June, 2009 for three hybrid and five non-hybrid car models to estimate the share of federal tax preferences for purchasing hybrid cars that accrues to car sellers. Our preferred estimates suggest that almost one-half of the subsidy is capitalized into car prices, but some specifications lead to larger estimated benefits for car suppliers. Our results also show (1) that a California program providing HOV stickers to owners of hybrid fuel automobiles led to large increases in the price of those vehicles, and (2) that failing to control for rising gas prices which increase the demand for fuel efficient vehicles leads to upwardly biased estimates of the amount of the hybrid car tax subsidy captured by automakers.
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Do environmental regulations affect the location decisions of multinational gold mining firms?
Lise Tole & Gary Koop
Journal of Economic Geography, forthcoming
Abstract:
This article empirically analyzes the regional location decisions of the world's; major gold mining firms using a dataset of political, economic, regulatory, infrastructural and investment risk variables observed since
1975. The aim is to determine whether environmental stringency affects regional location decisions after controlling for other potentially important variables that may affect such decisions. Empirical results suggest that gold mining firms are strongly attracted to regions that are close to their head office and have low levels of corruption. They also have some preference for regions which provide a low risk, secure, transparent and stable environment for doing business. Gold mining firms also appear to be attracted to regions that have a clean environment, although evidence is less uniformly robust. However, most important key question of this study is that is there no evidence for pollution haven activity among the world's industrial gold mining firms?
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The Distributional Effects of Pollution Regulations: Rental Housing and Air Quality Improvements
Corbett Grainger
University of California Working Paper, January 2010
Abstract:
The 1990 Clean Air Act Amendments (CAAA) led to a significant decrease in the concentration of suspended particulate matter (PM10), and economic theory suggests that these improvements in air quality should be capitalized into housing values. Changes in housing prices play an important role in determining the incidence of environmental regulations: if the increase in value due to cleaner air is fully passed forward in the form of higher rental prices, renters may receive no net benefit from the regulations. Using instrumental variables as well as a regression discontinuity design at varying levels of spatial aggregation, I find that the 1990 CAAA led to a significant increase in rental prices, but the estimated percentage effect is between two and three times smaller than that of owner-occupied housing values. However, when comparing the effect across housing types in areas with similar income levels, the percentage change in rents is not statistically different from the effect on housing values. This suggests that rents fully reflect the value of the air quality improvement and that the full benefits of the regulations accrue to landowners.
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Temperature and the Allocation of Time: Implications for Climate Change
Joshua Graff Zivin & Matthew Neidell
NBER Working Paper, February 2010
Abstract:
In this paper we estimate the impacts of climate change on the allocation of time using econometric models that exploit plausibly exogenous variation in daily temperature over time within counties. We find large reductions in U.S. labor supply in industries with high exposure to climate and similarly large decreases in time allocated to outdoor leisure. We also find suggestive evidence of short-run adaptation through temporal substitutions and acclimatization. Given the industrial composition of the US, the net impacts on total employment are likely to be small, but significant changes in leisure time as well as large scale redistributions of income may be consequential. In developing countries, where the industrial base is more typically concentrated in climate-exposed industries and baseline temperatures are already warmer, employment impacts may be considerably larger.
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Evidence for a recent increase in forest growth
Sean McMahon, Geoffrey Parker & Dawn Miller
Proceedings of the National Academy of Sciences, 23 February 2010, Pages 3611-3615
Abstract:
Forests and their soils contain the majority of the earth's terrestrial carbon stocks. Changes in patterns of tree growth can have a huge impact on atmospheric cycles, biogeochemical cycles, climate change, and biodiversity. Recent studies have shown increases in biomass across many forest types. This increase has been attributed to climate change. However, without knowing the disturbance history of a forest, growth could also be caused by normal recovery from unknown disturbances. Using a unique dataset of tree biomass collected over the past 22 years from 55 temperate forest plots with known land-use histories and stand ages ranging from 5 to 250 years, we found that recent biomass accumulation greatly exceeded the expected growth caused by natural recovery. We have also collected over 100 years of local weather measurements and 17 years of on-site atmospheric CO2 measurements that show consistent increases in line with globally observed climate-change patterns. Combined, these observations show that changes in temperature and CO2 that have been observed worldwide can fundamentally alter the rate of critical natural processes, which is predicted by biogeochemical models. Identifying this rate change is important to research on the current state of carbon stocks and the fluxes that influence how carbon moves between storage and the atmosphere. These results signal a pressing need to better understand the changes in growth rates in forest systems, which influence current and future states of the atmosphere and biosphere.
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Water Rights and Human Rights: The Poor Will not Need Our Charity if We Need Their Water
David Zetland
University of California Working Paper, February 2010
Abstract:
Each year, about 2.8 million people die due to problems with poor water supply, sanitation and hygiene. Over three-quarters of the dead are children. Some argue that a *human right* to clean water would improve this situation. This paper shows that human rights have not improved access to clean water and argues that it would be more productive to give people a *property right* to water. Because property rights - unlike human rights - are alienable, some portion of an individual's rights can be exchanged for access to clean water. Besides this basic equity outcome, property rights could enrich the poor, increase the efficient use of water, and improve water supply reliability in countries with poor governance.