Environmental Policy Mitigates Temperature Shock Risks

61 Pages Posted: 8 Nov 2021 Last revised: 21 Jul 2022

See all articles by Dimitrios Gounopoulos

Dimitrios Gounopoulos

University of Bath

Matthew Gustafson

Pennsylvania State University - Smeal College of Business

Tam Nguyen

University of Bath

Date Written: November 11, 2021

Abstract

Cross-state and (within state-year) county-level comparisons indicate a negative relation between abnormal temperature and quality of life in the U.S. since 1990. This temperature-quality of life relation is less negative in states with more stringent environmental policies in place prior to our sample period. This attenuating effect of environmental policy is concentrated in periods when the U.S. is most collaborative in the international fight against climate change. Additional tests indicate significant differences in the temperature-income sensitivity between states that adopt more stringent environmental policies, prior to the adoption decision. Together, our findings suggest (1) current environmental policies are an avenue of adaption to a warming climate, and (2) the effectiveness of these policies are bolstered with a national commitment to fighting climate change.

Keywords: temperature shocks, climate change, quality of life, state regulations, environmental policy

JEL Classification: G24, G28, E24, H31, H74, J15, O15, R23

Suggested Citation

Gounopoulos, Dimitrios and Gustafson, Matthew and Nguyen, Tam, Environmental Policy Mitigates Temperature Shock Risks (November 11, 2021). Available at SSRN: https://ssrn.com/abstract=3956921 or http://dx.doi.org/10.2139/ssrn.3956921

Dimitrios Gounopoulos (Contact Author)

University of Bath ( email )

School of Management,
Wessex House, Claverton Down
Bath, BA2 7AY
United Kingdom

Matthew Gustafson

Pennsylvania State University - Smeal College of Business ( email )

East Park Avenue
University Park, PA 16802
United States

Tam Nguyen

University of Bath ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
124
Abstract Views
510
rank
312,722
PlumX Metrics