Politics of Environmental Policymaking
Friday, Jan. 3, 2020 2:30 PM - 4:30 PM (PDT)
- Chair: Ivan Rudik, Cornell University
Micro-targeting Consumers’ Group Identities to Improve Consumptive Efficiency
AbstractUsing data gathered from an online choice experiment with a field experiment component, we estimate willingness to pay (WTP) for energy efficiency in the context of light bulbs. Using an identity economics framework, we find that liberals have a higher WTP than conservatives, and that both have a significantly positive WTP to conform to their group’s norm energy efficiency consumption level. We introduce two treatments, environmental and patriotic messaging, to highlight negative externalities associated with electricity consumption, as well as a baseline frugality message, finding heterogeneous responses of consumers to the alternative treatments. Using a machine learning model, we simulate energy efficiency decisions if the policy maker were able to optimally “micro-target” consumers with the most effective of the three messages. We show micro-targeting can improve energy efficiency significantly more than a homogeneous messaging campaign or substantial subsidies.
Solar Geoengineering in a Regional Analytic Climate Economy
AbstractThe paper analyzes geoengineering and strategic interactions in an integrated assessment model (IAM) of climate change. For this purpose, we (i) derive a new class of solutions to analytic IAMs that allows us to (ii) solve an integrated assessment model with sulfur-based geoengineering and damages in closed form, and to (iii) model realistic strategic interactions between regions. Temperatures respond to carbon dioxide (standard carbon cycle), sulfur injections into the stratosphere (fitted to scientific data), and a potential counter-geoengineering agent that can offset some of the sulfur-based cooling. Damages arise from the increase in temperatures, the chemical agent(s) employed for geoengineering, and the modulation of the radiative energy balance through geoengineering. Our dynamic game involves two active players that are either partially or fully affected by the other region’s geoengineering measures and have the ability to contribute, remain inactive, or offset some of the other region’s cooling measures. We shine new light on the“free-driver" problem popularized by Weitzman (2015), the climate-clash equilibria suggested by Heyen et al. (2019), a somewhat extreme sensitivity of geoengineering measures to potential damages, and the colloquial “slippery slope" argument showing how the active regions and the rest of the world respond to (some region’s) availability of geoengineering measures. We discuss these findings using analytic solutions for the social cost of carbon (globally or regionally optimal carbon tax).
Yea or Nay for Carbon Taxes: Political Economy and Willingness to Pay for Carbon Reduction in Washington
AbstractIn this study, I investigate the political economy of carbon taxes using voting outcomes for two recent
carbon tax initiatives in Washington State. Using spatial analysis, I merge precinct-level voting outcomes
with data on household characteristics at the zip code level. I compare and contrast the predictors of
support between the two initiatives, revealing how distinct provisions from each initiative beget
different voting patterns that align with economic theory. Using additional data on consumption
patterns and an extensive catalog of carbon footprints for various consumer activities, I quantify the
implied cost of each initiative for a representative household in every precinct. Exploiting cross-sectional
variation across zip codes, I estimate a demand curve for carbon taxes and estimate the willingness to
pay to reduce carbon emissions.
- Q5 - Environmental Economics
- H2 - Taxation, Subsidies, and Revenue