Table of Contents

A Century of Pollution and Mortality: London, 1866-1965

William Walker Hanlon, Leonard N. Stern School of Business - Department of Economics

Carbon Pricing

Shi-Ling Hsu, Florida State University - College of Law

Oil Prices & Dynamic Games Under Stochastic Demand

Isaiah Brown, Princeton University
Jacob Funk, Princeton University
Ronnie Sircar, Princeton University - Department of Operations Research and Financial Engineering

How Does Mandatory Energy Efficiency Disclosure Affect Housing Prices?

Alecia Waite Cassidy, University of Michigan at Ann Arbor


ENVIRONMENTAL ECONOMICS eJOURNAL

"A Century of Pollution and Mortality: London, 1866-1965" Free Download

WILLIAM WALKER HANLON, Leonard N. Stern School of Business - Department of Economics
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Relatively little is known about how the effects of pollution evolve as countries develop, due in part to the scarcity of historical pollution measures. This study improves our understanding of this process by estimating the acute effects of pollution in London across the century spanning 1866-1965 using detailed new weekly mortality data. To identify pollution effects I reviewed daily weather reports for over 31,000 days to identify fog events. I show that these events substantially increased pollution concentrations and that, because they depended on a complex set of climatic conditions, their week-to-week timing was as good as random after appropriate controls are included. This allows me to explore a variety of questions related to (1) the overall impact of acute pollution effects in London across the century, (2) how this impact evolved over time, (3) how pollution effects varied across age groups, (4) how pollution interacted with infectious diseases and (5) how the reduction in infectious diseases influenced the effects of pollution overall and for different age groups.

"Carbon Pricing" Free Download
Chapter 3 in Legal Pathways to Deep Decarbonization in the United States (Dernbach, J. and M. Gerrard, eds.) Forthcoming
FSU College of Law, Public Law Research Paper No. 860
FSU College of Law, Law, Business & Economics Paper No. 7-17

SHI-LING HSU, Florida State University - College of Law
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This draft book chapter describes carbon pricing, reviews the literature surrounding the efficacy and economic impacts of carbon pricing, and contains a global summary of carbon pricing laws.

Carbon pricing is commonly meant to refer to two main types of climate policy instruments: carbon taxation and cap-and-trade. The price is levied on a unit of emissions of carbon dioxide, or some other greenhouse gas, measured in terms of its global warming potential. If working as intended, carbon pricing could supplant some of the legal mechanisms that work through administrative and enforcement agencies and other traditional legal channels. Carbon pricing thus devolves most emission abatement decisions to private actors and allows emitters to choose specific methods of emissions reduction, in so doing reducing reliance on regulatory compliance mechanisms and providing flexibility and certainty for regulated parties.

Projecting the amount of emissions reductions from carbon pricing is challenging, as current economic data and tools are useful for making simple, ceteris paribus predictions, but less useful for modeling the complex and broad dynamics of a carbon price. The peer-reviewed literature, including reports by the U.S. Information Agency, suggest that a $25 per ton carbon price would reduce emissions by 11% to 31% by 2030. Other estimates suggest larger reductions are possible. Carbon pricing also presents the prospect of revenues, which can be used for a variety of purposes. This chapter reviews several possible uses of carbon pricing revenues, suggesting some rough macroeconomic effects.

"Oil Prices & Dynamic Games Under Stochastic Demand" Free Download

ISAIAH BROWN, Princeton University
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JACOB FUNK, Princeton University
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RONNIE SIRCAR, Princeton University - Department of Operations Research and Financial Engineering
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Oil prices remained relatively low but volatile in the 2015-17 period, largely due to declining and uncertain demand from China. This follows a prolonged decline from around $110 per barrel in June 2014 to below $30 in January 2016, due in large part to increased supply of shale oil in the US, which was spurred by the development of fracking technology. Most dynamic Cournot models focus on supply-side factors, such as increased shale oil, and random discoveries. However, uncertain demand is a major factor driving oil price volatility.

This motivates the study of Cournot games in a stochastic demand environment. We present analytic and numerical results, as well as a modified Hotelling's rule for games with stochastic demand. We highlight how lower demand forces out higher cost producers from producing, and how such changing market structure can induce price volatility.

"How Does Mandatory Energy Efficiency Disclosure Affect Housing Prices?" Free Download

ALECIA WAITE CASSIDY, University of Michigan at Ann Arbor
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Energy efficiency disclosure is an increasingly popular policy tool that has the potential to address market failures due to imperfect information in housing markets. However, there is little evidence that these policies increase capitalization of energy efficiency. This paper examines the effects of a mandatory energy efficiency disclosure policy on housing prices in Austin, TX. I compare prices before and after the introduction of the policy for homes with different levels of energy efficiency features. I find that the policy increased capitalization of energy efficiency features, and that the increase was larger for features that were more difficult to observe before the policy. The results highlight the important role of mandatory information disclosure policies in increasing the returns to energy efficiency investments by homeowners.

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LAWRENCE H. GOULDER
Shuzo Nishihara Professor of Environmental and Resource Economics, Stanford University - Department of Economics, Research Associate, National Bureau of Economic Research (NBER), University Fellow, Resources for the Future

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Sterling Professor of Economics, Yale University - Department of Economics, Sterling Professor of Economics, Cowles Foundation, Yale University, National Bureau of Economic Research (NBER)

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University of Arizona - Eller College of Management

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