More Latitude

Kevin Lewis

December 30, 2020

Local Sectoral Specialization in a Warming World
Bruno Conte et al.
NBER Working Paper, December 2020


This paper quantitatively assesses the world's changing economic geography and sectoral specialization due to global warming. It proposes a two-sector dynamic spatial growth model that incorporates the relation between economic activity, carbon emissions, and temperature. The model is taken to the data at the 1° by 1° resolution for the entire world. Over a 200-year horizon, rising temperatures consistent with emissions under Representative Concentration Pathway 8.5 push people and economic activity northwards to Siberia, Canada, and Scandinavia. Compared to a world without climate change, clusters of agricultural specialization shift from Central Africa, Brazil, and India's Ganges Valley, to Central Asia, parts of China and northern Canada. Equatorial latitudes that lose agriculture specialize more in non-agriculture but, due to their persistently low productivity, lose population. By the year 2200, predicted losses in real GDP and utility are 6% and 15%, respectively. Higher trade costs make adaptation through changes in sectoral specialization more costly, leading to less geographic concentration in agriculture and larger climate-induced migration.

Climate, insurance and innovation: The case of drought and innovations in drought-tolerant traits in US agriculture
Ruiqing Miao
European Review of Agricultural Economics, December 2020, Pages 1826-1860


This paper investigates the effects of crop insurance on agricultural innovation (namely, drought-tolerant traits) in the context of climate change. A conceptual framework is developed to model the market equilibrium of agricultural innovations. Hypotheses derived are then tested by using data for US agriculture. We find that the US agricultural sector responds to climate variation by increasing innovation activities, but this response is weakened by subsidised crop insurance by about 23 per cent. This indicates that crop insurance may have an unintended crowding-out effect as an option of risk management and may inhibit societies’ long-run capacity to adapt to climate change.

Impacts of climate change on hurricane flood hazards in Jamaica Bay, New York
Reza Marsooli & Ning Lin
Climatic Change, forthcoming


Sea level rise (SLR) and tropical cyclone (TC) climatology change could impact future flood hazards in Jamaica Bay - an urbanized back-barrier bay in New York - yet their compound impacts are not well understood. This study estimates the compound effects of SLR and TC climatology change on flood hazards in Jamaica Bay from a historical period in the late twentieth century (1980-2000) to future periods in the mid- and late-twenty-first century (2030-2050 and 2080-2100, under RCP8.5 greenhouse gas concentration scenario). Flood return periods are estimated based on probabilistic projections of SLR and peak storm tides simulated by a hydrodynamic model for large numbers of synthetic TCs. We find a substantial increase in the future flood hazards, e.g., the historical 100-year flood level would become a 9- and 1-year flood level in the mid- and late-twenty-first century and the 500-year flood level would become a 143- and 4-year flood level. These increases are mainly induced by SLR. However, TC climatology change would considerably contribute to the future increase in low-probability, high-consequence flood levels (with a return period greater than 100 year), likely due to an increase in the probability of occurrence of slow-moving but intense TCs by the end of twenty-first century. We further conduct high-resolution coastal flood simulations for a series of SLR and TC scenarios. Due to the SLR projected with a 5% exceedance probability, 125- and 1300-year flood events in the late-twentieth century would become 74- and 515-year flood events, respectively, in the late-twenty-first century, and the spatial extent of flooding over coastal floodplains of Jamaica Bay would increase by nearly 10 and 4 times, respectively. In addition, SLR leads to larger surface waves induced by TCs in the bay, suggesting a potential increase in hazards associated with wave runup, erosion, and damage to coastal infrastructure.

Probability Assessments of an Ice-Free Arctic: Comparing Statistical and Climate Model Projections
Francis Diebold & Glenn Rudebusch
NBER Working Paper, December 2020


The downward trend in the amount of Arctic sea ice has a wide range of environmental and economic consequences including important effects on the pace and intensity of global climate change. Based on several decades of satellite data, we provide statistical forecasts of Arctic sea ice extent during the rest of this century. The best fitting statistical model indicates that overall sea ice coverage is declining at an increasing rate. By contrast, average projections from the CMIP5 global climate models foresee a gradual slowing of Arctic sea ice loss even in scenarios with high carbon emissions. Our long-range statistical projections also deliver probability assessments of the timing of an ice-free Arctic. These results indicate almost a 60 percent chance of an effectively ice-free Arctic Ocean sometime during the 2030s - much earlier than the average projection from the global climate models.

Altered hippocampal microstructure and function in children who experienced Hurricane Irma
May Conley et al.
Developmental Psychobiology, forthcoming


Hurricane Irma was the most powerful Atlantic hurricane in recorded history, displacing 6 million and killing over 120 people in the state of Florida alone. Unpredictable disasters like Irma are associated with poor cognitive and health outcomes that can disproportionately impact children. This study examined the effects of Hurricane Irma on the hippocampus and memory processes previously related to unpredictable stress. We used an innovative application of an advanced diffusion‐weighted imaging technique, restriction spectrum imaging (RSI), to characterize hippocampal microstructure (i.e., cell density) in 9‐ to 10‐year‐old children who were exposed to Hurricane Irma relative to a non‐exposed control group (i.e., assessed the year before Hurricane Irma). We tested the hypotheses that the experience of Hurricane Irma would be associated with decreases in: (a) hippocampal cellularity (e.g., neurogenesis), based on known associations between unpredictable stress and hippocampal alterations; and (b) hippocampal‐related memory function as indexed by delayed recall. We show an association between decreased hippocampal cellularity and delayed recall memory in children who experienced Hurricane Irma relative to those who did not. These findings suggest an important role of RSI for assessing subtle microstructural changes related to functionally significant changes in the developing brain in response to environmental events.

Who Values Future Energy Savings? Evidence from American Drivers
Arik Levinson & Lutz Sager
NBER Working Paper, December 2020


Regulators attest that tightened energy efficiency standards save consumers money. Efficient light bulbs, appliances, and vehicles cost more upfront but reduce energy expenses by more than enough to compensate. We use survey data on American cars and their drivers to examine whether individual drivers have indeed underinvested in fuel economy, given the gas prices they face and the miles they drive. We find that may be true, but only on average. Some drivers could likely have saved money by spending more upfront for efficient cars. But many others could have saved money purchasing less expensive, less fuel-efficient cars. In fact we find little correlation between individual drivers’ annual fuel expenditures and their fuel economy choices: a driver’s income, sex, age, and education are far more closely associated with their vehicle’s fuel economy. We can rule out several explanations for the disconnect. Rich car purchasers do not seem to consider fuel expenses any more than poorer ones, undermining arguments that borrowing constraints prevent low-income consumers from investing in fuel efficiency. And the disconnect between fuel expenses and vehicle choice holds whether we examine anticipated or realized mileage, ruling out mistaken expectations about future driving as an explanation.

Do Renewable Portfolio Standards Deliver Cost-Effective Carbon Abatement?
Michael Greenstone & Ishan Nath
University of Chicago Working Paper, November 2020


The most prevalent and perhaps most popular climate policies in the U.S. are Renewable Portfolio Standards (RPS) that mandate that renewables (e.g., wind and solar) produce a specified share of electricity, yet little is known about their efficiency. Using the most comprehensive data set ever compiled and a difference-in-differences style research design, we find that electricity prices are 11% higher seven years after RPS passage, largely due to indirect grid integration costs (e.g., transmission and intermittency). On the benefit side, carbon emissions are 10-25% lower. The cost per ton of CO2 abatement ranges from $58-$298 and is generally above $100.

The Impact of the Corporate Average Fuel Economy Standards on Technological Changes in Automobile Fuel Efficiency
Yiwei Wang & Qing Miao
Resource and Energy Economics, forthcoming


This paper empirically examines the effect of the U.S. Corporate Average Fuel Economy (CAFE) standards on the technological progress in automobile fuel efficiency. Using detailed vehicle attributes data from 1978 through 2018, we find that more stringent fuel economy standards increase the rate of technological improvements in new passenger cars, and this effect is primarily driven by the response of U.S. automakers. We do not find evidence that CAFE standards have a similar effect on the technical change in light-duty trucks. Our results also indicate that higher gasoline prices have a significant and positive effect on the improvement of fuel-saving technology in both passenger cars and light trucks. Using our empirical estimates, we project that the recent rollback of Obama-era CAFE standards would forego an approximately 2-percent increase in cars’ fuel economy over the 2021-2025 period as a result of technological progress.

Comparing public perceptions of sea level rise with scientific projections across five states of the U.S. Gulf Coast region
Wanyun Shao, Hamed Moftakhari & Hamid Moradkhani
Climatic Change, November 2020, Pages 317-335


Sea level rise (SLR) in the twenty-first century poses fundamental risks to coastal residents. The US Gulf of Mexico Coast (Gulf Coast) is among the regions experiencing the most rapid relative SLR. Beyond its increasing exposure to SLR and related coastal flooding, the Gulf Coast is home to a large population and displays high social vulnerability. How the coastal population in this vulnerable region perceives the impending risks posed by SLR warrants further examination. Do coastal residents’ perceptions of SLR conform to the scientific projections? We adopt an integrative approach based on a 2019 survey merged with contextual data including percentage of population living within the Special Flood Hazard Area (SFHA) and social vulnerability at the county level, both of which are extracted from the Centers for Disease Control and Prevention. We find that public risk perceptions of sea level change are influenced by political predisposition, with Republicans being less likely than Democrats to expect SLR in the future. Moreover, SLR remains a temporally distant issue among coastal residents. We then directly compare public expectations and scientific estimations of SLR in five states of the US Gulf Coast region and find that coastal residents in states that have experienced faster SLR in the past are more optimistic about future SLR by underestimating its magnitude compared to those experiencing slower SLR. Moreover, we find that people likely conflate the severity with likelihood of SLR risk. The contextual force represented by percentage of population living within the SFHA designated by the Federal Emergency Management Agency (FEMA) can significantly influence individuals’ estimations of future SLR, with higher percentages leading to higher estimates. We suspect that the SFHA has become a powerful risk communication tool that influences coastal residents’ judgments about future risk.

Abrupt shift to hotter and drier climate over inner East Asia beyond the tipping point
Peng Zhang et al.
Science, 27 November 2020, Pages 1095-1099


Unprecedented heatwave-drought concurrences in the past two decades have been reported over inner East Asia. Tree-ring-based reconstructions of heatwaves and soil moisture for the past 260 years reveal an abrupt shift to hotter and drier climate over this region. Enhanced land-atmosphere coupling, associated with persistent soil moisture deficit, appears to intensify surface warming and anticyclonic circulation anomalies, fueling heatwaves that exacerbate soil drying. Our analysis demonstrates that the magnitude of the warm and dry anomalies compounding in the recent two decades is unprecedented over the quarter of a millennium, and this trend clearly exceeds the natural variability range. The “hockey stick”-like change warns that the warming and drying concurrence is potentially irreversible beyond a tipping point in the East Asian climate system.

Locked into Emissions: How Mass Incarceration Contributes to Climate Change
Julius Alexander McGee, Patrick Trent Greiner & Carl Appleton
Social Currents, forthcoming


The phenomenon of mass incarceration has dramatically altered the economic and infrastructural landscape of the United States. These changes have numerous implications regarding the use of fossil fuels, which are the single largest contributor to climate change. The present study argues that mass incarceration creates three social patterns that result in significant increases in industrial emissions. (1) Mass incarceration incentivizes further industrial development through the construction of new prisons and the continued maintenance of existing prisons to house prisoners. (2) The needs of the millions of individuals currently incarcerated in the United States incentivize industrial expansion through the production of goods and materials used inside prisons. (3) Incarcerated individuals are being used to reduce the cost of labor, which expands economic growth. We construct several fixed-effects panel regression models with robust standard errors predicting industrial emissions for U.S. states from 1997 to 2016 to assess how increases in the number of individuals in U.S. state, federal, and private prisons is correlated with industrial emissions over time. We find that increases in incarceration within states are associated with increases in industrial emissions, and that increases in incarceration lead to a more tightly coupled association between gross domestic product per capita and industrial emissions.


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