Trying Again
The Macroeconomic Effects of Climate Policy Uncertainty
Konstantinos Gavriilidis et al.
NBER Working Paper, January 2026
Abstract:
We develop a novel measure of climate policy uncertainty based on newspaper coverage. Our index spikes during key U.S. climate policy events — including presidential announcements on international agreements, congressional debates, and regulatory disputes — and shows a recent upward trend. Using an instrument for plausibly exogenous uncertainty shifts, we find that higher climate policy uncertainty decreases output and emissions while raising commodity and consumer prices, acting as supply rather than demand shocks. Faced with this trade-off, monetary policy does not accommodate climate policy uncertainty shocks, shaping their transmission. Firm-level analyses show stronger declines in investment and R&D when firms have higher climate change exposure.
Why Biden-era clean energy investment policies had limited political returns
Alexander Gazmararian, Nathan Jensen & Dustin Tingley
Proceedings of the National Academy of Sciences, 3 March 2026
Abstract:
The Biden Administration enacted the largest federal policy framework to incentivize clean energy and decarbonization in U.S. history. We examine whether Biden-era green investments produced political returns by affecting public opinion. Using geolocated survey data linked to investment records and a database of company and politician statements, we assess project visibility and credit attribution. People closer to new renewable energy and green manufacturing facilities are more likely to notice these investments but are not more likely to credit the Biden Administration. Instead, the public sees governors as most responsible. This credit allocation pattern aligns with the political message environment: Governors more frequently claim credit than the White House and companies spread recognition broadly across political actors. This fragmented information environment illustrates the limits of using less traceable forms of green spending to generate electoral gains and public support for climate policy.
Estimating the Impact of Taylor Swift's Eras Tour on Local Air Quality
Susane Leguizamon & Stephen Locke
Southern Economic Journal, forthcoming
Abstract:
Taylor Swift's Eras Tour is the highest-grossing concert tour in history, with the average attendance of each concert exceeding that of the Super Bowl. While host cities largely welcome the economic activity that accompanies these events, a noted potential drawback is the effect on local air quality. This paper uses air quality data from the Environmental Protection Agency to analyze the impact of concerts on ozone and PM2.5 concentrations within 10 miles of concert venues. We find that, relative to baseline levels, Eras Tour concerts were associated with statistically and economically significant increases in ozone and PM2.5 concentrations that began before and persisted after the concert day. Air quality on concert days is also found to be twice as likely to be categorized as “unhealthy for sensitive populations,” a category that includes children. The increase in pollution associated with these events exceeds, on average that of any documented large-scale sporting event. This finding contributes to the growing recognition of the broader environmental externalities associated with large public gatherings.
Symptom or Culprit? Social Media, Air Pollution, and Violence
Xinming Du
Economic Journal, forthcoming
Abstract:
This paper provides the first causal evidence that hostile activities online trigger physical violence. Given the recently documented relationship between pollution and social media, I exploit exogenous variation in local air quality as an instrument for online aggression. An event study analysis shows that air pollution increases by 5.8 standard deviations (SD) when refineries experience unexpected malfunctions. On pollution spike days, surrounding areas see 0.11 SD more aggressive tweets and 0.24 SD more crimes; geographically distant but socially networked regions see aggressive tweets increase by 0.008 SD and crimes by 0.015 SD. My findings highlight the impacts of online hostility and contribute to the debate on cyberspace regulation.
Transmission lowers US generation costs, but generator incentives are not aligned
Dasom Ham, Owen Kay & Catherine Hausman
Proceedings of the National Academy of Sciences, 3 March 2026
Abstract:
The US electricity grid is rapidly evolving with the entry of low-cost renewable electricity. As a result, new supply is not spatially matched to demand, and the transmission network has become more strained. Better market integration could thus lower US generation costs. We document that eliminating interregional constraints would have reduced electricity generation costs across the lower US 48 states by $5.8 to 7.1 billion in 2022 and $3.4 to 5.0 billion in 2023. But market integration creates winners and losers among generation companies, and we show that producers in some regions have incentives to delay or block grid integration despite the overall system benefits.
Polluting Public Funds: The Effect of Environmental Regulations on Municipal Bonds
Akshaya Jha, Stephen Karolyi & Nicholas Muller
Management Science, forthcoming
Abstract:
We present two findings on how environmental policy uncertainty impacts municipal bond returns. First, yields increase after a new pollution standard is proposed but decrease after this standard is finalized. Second, after annual announcements of compliance status, yields fall for counties that remain in compliance but increase for newly noncompliant counties. We present suggestive evidence linking these short-run municipal bond market reactions to long-run changes in pollution and housing prices. Our findings suggest that increases in either regulatory stringency or uncertainty over future environmental policy increase the cost of municipal debt raised to fund schools, hospitals, and critical infrastructure.
The Unequal Costs of Carbon Pricing: Economic and Political Effects Across European Regions
Maximilian Konradt & Giacomo Mangiante
Economic Journal, forthcoming
Abstract:
This paper examines the economic and political effects of carbon pricing across European regions. Our main finding is that a well-identified increase in carbon prices reduces emissions but entails economic and political costs: higher carbon prices significantly reduce output and employment while increasing vote shares for extremist and populist parties, contributing to political fragmentation. Consistent with an economic voting channel, opinion surveys reveal a more pessimistic economic outlook and declining environmental concerns among respondents. Importantly, the economic and political costs are not borne equally: carbon-intensive regions experience a larger decline in output and see a stronger shift to extremist political parties. Our findings highlight the need for complementary policies to mitigate the unequal economic impacts of carbon pricing and the associated political backlash.
Enduring impacts of El Niño on life expectancy in past and future climates
Yanbin Xu et al.
Nature Climate Change, February 2026, Pages 148-154
Abstract:
The El Niño–Southern Oscillation (ENSO) is a major driver of global climate variability, yet its long-term effect on life expectancy remains unclear. Here we quantify how ENSO persistently impedes mortality improvement, leading to considerable life expectancy and economic losses across high-income Pacific Rim countries. We estimate life expectancy losses of 0.5 years (monetary equivalent loss of US$2.6 trillion) for the 1982–1983 El Niño and 0.4 years (US$4.7 trillion) for the 1997–1998 event. Climate projections under moderate emissions pathways suggest a cumulative decline of 2.8 years in life expectancy by 2100, amounting to US$35 trillion losses, with most of the monetary burden falling on the middle-aged population. These findings reveal that intensifying ENSO variability poses an underrecognized and enduring threat to human health and socio-economic stability, underscoring the urgent need for targeted adaptation strategies to safeguard population well-being.
Sport hunting associated with favourable conservation status of mammals
Jacob Hill, Kenneth Kellner & Jerrold Belant
Nature Sustainability, January 2026, Pages 46-50
Abstract:
Here we analysed use and trade data for terrestrial mammal species worldwide and found that sport hunted species were more likely to have stable or increasing populations and less likely to be listed as threatened compared with non-sport hunted species. Species hunted for food were not more likely to have decreasing populations or be listed as threatened compared with those not hunted for food. These results suggest that sport hunting is linked with more favourable conservation status of mammal species and can be a component of sustainable wildlife management.
Vog: Using Volcanic Eruptions to Estimate the Impact of Air Pollution on Student Test Scores
Rachel Inafuku et al.
Oxford Bulletin of Economics and Statistics, February 2026, Pages 113-140
Abstract:
We pair variation stemming from volcanic eruptions with the census of Hawaii's public schools' student test scores to estimate the impact of PM2.5 and SO2 on student performance. Increased particulate pollution decreases test scores. These results are concentrated among schools with the highest long-term average levels of pollution. The effects of PM2.5 are larger for the poorest pupils by a factor of at least three. We demonstrate that poor air quality disproportionately impacts the human capital accumulation of economically disadvantaged children.