New Frontiers in Environmental Economics
Friday, Jan. 5, 2024 8:00 AM - 10:00 AM (CST)
- Chair: Joseph S. Shapiro, University of California-Berkeley
Water Works: Causes and Consequences of Safe Drinking Water in America
AbstractSince the 1974 US Safe Drinking Water Act, public and private sources have spent $2 trillion to provide safe drinking water, but in a typical year, ten to twenty percent of Americans drink water violating standards. Because drinking water treatment is a local public good with few inter-jurisdictional externalities, the theory of fiscal federalism argues against federal funding of it. We study drinking water pollution's trends, causes, and consequences, using 230 million pollution readings covering 1,800 pollutants from 48 US states over decades that we obtained from dozens of Freedom of Information Act requests and state repositories, and linked geographically to administrative Medicare data. We have three main findings. First, concentrations of regulated drinking water pollutants have declined enormously. The share of drinking water violating current health standards, for example, fell by over half in the period 2003-2019, though concentrations of unregulated pollutants have changed little. Low-income and Hispanic communities had higher baseline pollution levels but more rapid pollution declines. Second, the Safe Drinking Water Act's loans to cities substantially decrease pollution. Through these loans, it costs under $50 annually per person to eliminate pollution above health standards. Third, these loans substantially decrease mortality rates of older Americans. We estimate a cost per premature death avoided of $150,000 to $300,000, and net benefits from these loans of several hundred billion
Income, Wealth, and Environmental Inequality in the United States
AbstractEnvironmental inequality is thought to be rooted in various aspects of economic inequality, and addressing the latter is believed to reduce the former. However, the relationship between environmental exposure and economic well-being is not well understood, as data on environmental exposure and economic well-being are typically unavailable at the same spatial resolution, and existing evidence on the relationships be- tween income and environmental exposures is largely correlational. This paper aims to provide systematic evidence on the relationship between pollution exposure, income, wealth, and race by combining admin- istrative data from tax returns between 1984-2019, remote sensing measurements of particulate exposure, and sociodemographic information from linked survey, Census, and administrative data. We document new facts about the observational relationships between income, wealth, and particulate exposure at the individual level, showing how these relationships differ by race and have changed over time. We use quasi-random shocks to income to examine the causal effect of changes in income and wealth on pollution exposure. We find that racial disparities in pollution exposure are unlikely to be ameliorated by relative improvements in the distribution of income or wealth in the short and medium run.
Sea Level Rise and Urban Adaptation in Jakarta
AbstractSea level rise poses an existential threat to Jakarta, which faces frequent and worsening flooding. The government has responded with a proposed sea wall. In this setting, I study how government intervention complicates long-run adaptation to climate change. I show that government intervention creates coastal moral hazard, and I quantify this force with a dynamic spatial model in which developers and residents act with flood risk in mind. I find that moral hazard generates severe lock-in and limits migration inland, even over the long run.
- Q5 - Environmental Economics
- Q0 - General