Do energy prices influence investment in energy efficiency? Evidence from energy star appliances

I examine whether electricity prices influence the likelihood that consumers purchase high efficiency appliances by using state-year panel data on electricity prices and the proportion of sales of new appliances that involve high efficiency “Energy Star” models. I find no evidence that electricity prices affect the propensity for consumers to choose high efficiency appliances. Point estimates are extremely small and precisely estimated. The findings suggest that price-based energy policies may be limited in the extent to which they increase investment in residential energy efficiency, which has been considered one of the lowest cost opportunities for reducing carbon emissions.     

Are energy efficiency standards justified?

This paper develops an analytical framework for comparing the welfare effects of energy efficiency standards and pricing policies for reducing gasoline, electricity, and nationwide carbon emissions. The model is parameterized with US data and includes key externalities in the energy/transportation sectors and possible underinvestment in energy efficiency due to “misperceptions” over energy savings. Even with large misperceptions, the extra welfare gains from complementing efficient pricing policies with energy efficiency standards are zero for reducing gasoline and 5 percent for reducing electricity. And when viewed as substitutes, these standards forgo 60 percent or more of the potential welfare gains from corresponding pricing policies. A combination of energy efficiency and emissions standards is more than three times as costly as carbon pricing when there is no misperception over energy savings, and even with large misperceptions, combining carbon pricing with gasoline/electricity taxes is better than combining it with energy efficiency standards.     

Is energy efficiency capitalized into home prices? Evidence from three U.S. cities

We test for evidence that energy efficiency features are capitalized into home prices in three U.S. metropolitan areas. Using hedonic regressions and multiple matching procedures, we find that Energy Star certification is associated with higher sales prices in two of the markets: the Research Triangle region of North Carolina and Portland, Oregon. We find that local “green” certifications in Portland and in Austin, Texas, are also associated with higher prices and that the estimated price impacts are larger than those from Energy Star. Matching on observables proves to be important in some cases, reducing the estimated impacts compared with models without matching. We calculate the implied energy savings from the estimated premiums and find that, in the Research Triangle market, the Energy Star premiums approximately equal the savings that program is designed to achieve, but in Portland, the premiums are slightly greater than the program's savings due to low energy costs in the region.     

Can household consumers save the wild fish? Lessons from a sustainable seafood advisory

Conservation organizations seeking to reduce over-fishing and promote better fishing practices have increasingly turned to market-based mechanisms such as environmental sustainability labels (eco-labels) in order to shift patterns of household consumption. This paper presents an analysis of consumer response to an advisory for sustainable seafood adopted by a regional supermarket in the United States. The advisory consisted of a label in which one of three traffic light colors was placed on each fresh seafood product to inform consumers about its relative environmental sustainability. Green meant “best” choice, yellow meant “proceed with caution,” and red meant “worst choice”. Using a unique product-level panel scanner data set of weekly sales and taking advantage of the random phase-in of the advisory by the retailer, we apply a difference-in-differences identification strategy to estimate the effect of the advisory on overall seafood sales as well as the heterogeneous impact of the advisory by label color and whether the seafood met additional health-related criteria. We find evidence that the advisory led to a statistically significant 15.3% decline in overall seafood sales, a statistically significant 34.9% decline in the sale of yellow labeled seafood, and a statistically significant 41.3% decline in the sale of yellow labeled seafood on a mercury safe list. We find no statistically significant difference in sales of green or red labeled seafood.     

Do EPA regulations affect labor demand? Evidence from the pulp and paper industry

Any opinions and conclusions expressed herein are those of the author(s) and do not necessarily represent the views of the U.S. Census Bureau or the U.S. Environmental Protection Agency. All results have been reviewed to ensure that no confidential information is disclosed. We thank Wang Jin and Shital Sharma for excellent research assistance; we also thank Jim Davis at the Boston Research Data Center for his continued help, and Reed Walker and participants at the 2011 AERE Summer Conference and the Environmental Economics seminar at Harvard University?s Kennedy School for helpful comments. Any remaining errors are ours.     

Do energy prices affect employment? Decomposed international evidence

This paper analyzes the energy price-employment nexus and contributes to the literature by showing that it is important to decompose the regulatory effect into demand, cost, and factor-shift effects. This is done by means of a cross-country multi-sectoral dataset. The results show that both rising energy prices and shadow prices of energy have no significant effect on net employment when the manufacturing sectors only are analyzed. While finding significant variations across countries, the average employment effects become significantly positive once jobs in the economy as a whole are considered. This change is driven mainly by larger positive cost effects, which more than offset the negative demand effects and reductions in the positive factor-shift effects. Moreover, the paper reveals that the often implemented approach of using a simple regulation regressor, instead of decomposing the employment effect, can result in biased estimates.     

Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey

This paper examines whether the impact of environmental regulations differs by the size of the business. We consider the net effect of statutory, enforcement, and compliance asymmetries by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau's Pollution Abatement Costs and Expenditures (PACE) survey and from its Annual Survey of Manufactures and Census of Manufactures. We model establishments' pollution abatement operating costs (PAOC) per unit of economic activity as a function of establishment size, industry, state, and year. Our results show that PAOC intensity increases with establishment and firm size.     

Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey

This paper examines whether the impact of environmental regulations differs by the size of the business. We consider the net effect of statutory, enforcement, and compliance asymmetries by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau's Pollution Abatement Costs and Expenditures (PACE) survey and from its Annual Survey of Manufactures and Census of Manufactures. We model establishments' pollution abatement operating costs (PAOC) per unit of economic activity as a function of establishment size, industry, state, and year. Our results show that PAOC intensity increases with establishment and firm size.     

Do voluntary pollution reduction programs (VPRs) spur or deter environmental innovation? Evidence from 33/50

We study whether a government-sponsored voluntary pollution reduction program (VPR) promotes or deters the development of new environmental technologies that yield future emission reduction benefits. Using a panel of 127 U.S. manufacturing industries defined by 3-digit SIC classifications over the 1989–2004 period, we estimate impacts of industry-level participation in the 33/50 program, a VPR initiated by government regulators in 1991, on industry-level rates of environmental patenting. We find that higher rates of 33/50 program participation are associated with significant reductions in the number of successful environmental patent applications five to nine years after the program ended.     

Do renewable energy policies reduce carbon emissions? On caps and inter-industry leakage

In a parsimonious two-sector general equilibrium model, we challenge the widely-held tenet that within a cap-and-trade system renewable energy policies have no effect on carbon emissions. If the cap does not capture all sectors, we demonstrate that variations of a renewable energy subsidy change aggregate carbon emissions through an inter-industry leakage effect. We decompose this effect into intuitively intelligible components that depend in natural ways on measurable elasticity parameters. Raising the subsidy always reduces emissions if funded by a lump-sum tax, reinforcing recent findings that tightening environmental regulation can cause negative leakage. However, if the subsidy is funded by a levy on electricity, it can increase emissions. These results provide a valuable basis for an informed design of renewable energy policies and an accurate assessment of their effectiveness. We highlight how a state-of-the-art statistic used by governments to gauge such effectiveness, “virtual emission reductions”, is biased, because inter-industrial leakage effects are not captured.     

When do environmental regulations backfire? Onsite industrial electricity generation,energy efficiency and policy instruments

More than half of all energy produced by electric utilities is lost in the form of waste heat. However, when manufacturing facilities choose to produce their own electricity, this waste heat is captured by Combined Heating and Power (CHP) technologies and used in the production process. As a result, manufacturers' pollution footprint can be dramatically reduced by choosing to produce electricity onsite rather than purchasing it from a utility. This paper uses Census microdata to study manufacturers’ decision to produce electricity onsite and examines how plants adjust onsite generation when they are subject to environmental regulations. Environmental regulations will backfire if they cause manufacturers to produce less electricity onsite and shift to electricity from less efficient, offsite electric utilities. We find that manufacturing plants subject to NOx command-and-control regulations decrease onsite electricity generation, increase electricity purchases from off-site utilities and see declines in their energy efficiency. However, manufacturers subject to cap-and-trade see no decline in onsite generation and experience improvements in energy efficiency. These findings demonstrate the importance of instrument selection and identify a new pathway through which emissions leakage may occur.     

Is globalisation linked to CO2 emission? Evidence from OECD nations

Environmental and Ecological Statistics - An extensive number of studies uses trade-to-GDP as a proxy for globalisation in environmental research. Globalisation encompasses much more than just...     

Do plant–pollinator interaction networks result from stochastic processes?

Plant–pollinator interaction networks are characterized by several features that cannot be obtained from a totally random network (e.g. nestedness, power law distribution of degree specialization, temporal turnover). One reason is that both plants and pollinators are active for only a part of the year, and so a plant species flowering in spring cannot interact with a pollinator species that is active only in autumn. In this paper we build a stochastic model to simulate the plant–pollinator interaction network, taking into account the duration of activity of each species. To build the model we used an empirical plant–pollinator network from a Mediterranean scrub community surveyed over four years. In our simulated annual cycle we know which plant and pollinator species are active, and thus available to interact. We can obtain simulated plant–pollinator interaction networks with properties similar to the real ones in two different ways: (i) by assuming that the frequency distribution of both plant and pollinator duration of activity follow an exponential function, and that interaction among temporally coexisting species are totally random, and (ii) by assuming more realistic frequency distributions (exponential for pollinators, lognormal for plants) and that the interaction among coexisting species is occurring on a per capita basis. In the latter case we assume that there is a positive relationship between abundance and duration of activity. In our model the starting date of the species activity had little influence on the network structure. We conclude that the observed plant–pollinator network properties can be produced stochastically, and the mechanism shaping the network is not necessarily related to size constraints. Under such conditions co-evolutionary explanations should be given with caution.     

Do leaf-cutter ants Atta colombica obtain their magnetic sensors from soil?

How animals sense, process, and use magnetic information remains elusive. In insects, magnetic particles are candidates for a magnetic sensor. Recent studies suggest that the ant Pachycondyla marginata incorporates iron-containing particles from soil. We used leaf-cutter ants Atta colombica to test whether soil contact is necessary for developing a functional magnetic compass. A. colombica is the only invertebrate known to calculate a path-integrated home vector using a magnetic compass. Here, we show that A. colombica requires contact with soil to incorporate magnetic particles that can be used as a magnetic compass; yet, we also show that ants can biosynthesize magnetic particles. Workers from a soil-free colony ignored a 90° shift in the horizontal component of the geomagnetic field, yet oriented homeward despite the occlusion of any geocentric cues. In contrast, workers from a soil-exposed colony oriented to an intermediate direction between their true and subjective home in the shifted field. Homeward orientations under shifted fields suggest that ants calculated a path-integrated vector using proprioceptive information. Strikingly, ants from the soil-free colony also had magnetic particles; yet, as observed by ferromagnetic resonance, these particles differed from those in soil-exposed ants and were not associated with a magnetic compass sensitive to this experimental manipulation.     

Do water saving technologies save water? Empirical evidence from North China

This paper describes the extent of water saving technologies usage and evaluates their impacts on water use, water productivity, total irrigated sown area and crop mix in North China. A set of panel data collected at the househol.d and plot levels is used in empirical analysis. Water saving technologies are categorized into traditional technologies, household-based technologies and community-based technologies. By 2007, traditional technologies and household-based technologies are used in almost all sample villages. However, the shares of sown area on which water saving technologies are used are still fairly low. Econometric analysis using plot level fixed effects show that using water saving technologies can reduce crop water use and improve the productivity of water. The positive effects are generated mainly through the use of household-based or community-based technologies. The use of water saving technologies does not have statistically significant impacts on total irrigated sown area and crop mix.     

What can we learn from benefit transfer errors? Evidence from 20 years of research on convergent validity

We develop a nonparametric approach to meta-analysis and use it to identify modeling decisions that affect benefit transfer errors. The meta-data describe the results from 31 empirical studies testing the convergent validity of benefit transfers. They evaluated numerous methodological procedures, collectively reporting 1071 transfer errors. Our meta-regressions identify several important findings, including: (1) the median absolute error is 39%; (2) function transfers outperform value transfers; (3) transfers describing environmental quantity generate lower transfer errors than transfers describing quality changes; (4) geographic site similarity is important for value transfers; (5) contingent valuation generates lower transfer errors than other valuation methods; and (6) combining data from multiple studies tends to reduce transfer errors.     

Are functional traits good predictors of demographic rates? Evidence from five neotropical forests

A central goal of comparative plant ecology is to understand how functional traits vary among species and to what extent this variation has adaptive value. Here we evaluate relationships between four functional traits (seed volume, specific leaf area, wood density, and adult stature) and two demographic attributes (diameter growth and tree mortality) for large trees of 240 tree species from five Neotropical forests. We evaluate how these key functional traits are related to survival and growth and whether similar relationships between traits and demography hold across different tropical forests. There was a tendency for a trade-off between growth and survival across rain forest tree species. Wood density, seed volume, and adult stature were significant predictors of growth and/or mortality. Both growth and mortality rates declined with an increase in wood density. This is consistent with greater construction costs and greater resistance to stem damage for denser wood. Growth and mortality rates also declined as seed volume increased. This is consistent with an adaptive syndrome in which species tolerant of low resource availability (in this case shade-tolerant species) have large seeds to establish successfully and low inherent growth and mortality rates. Growth increased and mortality decreased with an increase in adult stature, because taller species have a greater access to light and longer life spans. Specific leaf area was, surprisingly, only modestly informative for the performance of large trees and had ambiguous relationships with growth and survival. Single traits accounted for 9-55% of the interspecific variation in growth and mortality rates at individual sites. Significant correlations with demographic rates tended to be similar across forests and for phylogenetically independent contrasts as well as for cross-species analyses that treated each species as an independent observation. In combination, the morphological traits explained 41% of the variation in growth rate and 54% of the variation in mortality rate, with wood density being the best predictor of growth and mortality. Relationships between functional traits and demographic rates were statistically similar across a wide range of Neotropical forests. The consistency of these results strongly suggests that tropical rain forest species face similar trade-offs in different sites and converge on similar sets of solutions.     

Are policy incentives for solar power effective? Evidence from residential installations in the Northeast

State incentives for solar power have grown significantly in the past several years. This paper examines the effectiveness of policy incentives to increase residential solar photovoltaic (PV) capacity. We use county-level panel data and control for demographic characteristics, solar resources, and pro-environmental preferences. Results show that among financial incentives, rebates have the most impact with an additional $1 per watt rebate increasing annual PV capacity additions by close to 50%. Factors that affect financial returns to solar PV such as electricity price and solar insolation are also found to be significant. Results also point to a significant positive relationship between hybrid vehicle sales and residential PV capacity growth, indicating the importance of pro-environmental preferences as a predictor of solar PV demand. Back of the envelope calculations suggest that the cost of carbon mitigation through rebates is around $184 per ton of CO₂.     

Do biodiversity indices behave as expected from traits of constituent species in simulated scenarios?

It is believed that diversity of plant communities has a positive effect on their productivity. The benefits of diversity are described by “biodiversity indices”, comparing yield of mixtures with yields of monocultures of constituent species. These indices are supposed to capture also the main mechanisms leading to increased yield. We have constructed a spatially explicit individual based model, simulating even-aged stand development, and compared the behaviour of selected biodiversity indices (overyielding, selectivity and complementarity) with expectations based on life history traits of constituent species. The results are based on comparisons of two species mixtures with corresponding monocultures. We designed three scenarios of changes in the two species life history differentiation, and compared the behaviour of the indices with expectation based on it. In the first scenario, selectivity was driven by increasing size inequality of the two species, mostly in accordance with expectations. The second scenario presents increasing shade tolerance of the smaller species that increased complementarity, again mostly as expected. In the last scenario, shortening of length of stress tolerance of the weaker species surprisingly increased values of the biodiversity indices. For each setting, we varied sowing density and spatial pattern of the constituent species. The behaviour of the indices was influenced by both factors, but the effect of density was more pronounced. In particular, at high sowing densities, the most important interactions happened in the very early stages of mixture development, and the behaviour of the indices was often counter-intuitive.     

Is sexual monomorphism a predictor of polygynandry? Evidence from a social mammal, the collared peccary

Sexual dimorphism is common in polygynous species, and there is clear evidence that both intra-sexual competition and female preferences can drive the evolution of large body size in males. In contrast, sexual monomorphism is often argued to reflect a relaxation of male mate competition or an intensification of resource competition among females. Alternatively, it might imply opportunities for females to circumvent or counteract male mate competition in a polygynandrous mating system. We test the prediction that sexual monorphism is associated with polygynandry in the collared peccary (Pecari tajacu, Tayassuidae), a social ungulate closely related to the old-world suids. The genetic mating system in the Tayassuidae is unknown, but its sexual monomorphism presents a striking contrast to the strong size dimorphism found in most Suidae, so that a departure from the polygynous system common in Suidae would be noteworthy. We characterized genetic relationships among adults within herds in three geographically distinct populations, assigned parents to 75 offspring, and tested for skew in individual reproductive success. Parentage assignment data indicated that multiple males sire offspring within a herd, and in the population for which genetic data were most complete, 19% of parentage assignments were potentially sired by extra-herd males. Some litters have multiple sires, and neither males nor females monopolized reproduction, even in small herds. This result supports our prediction and suggests that sexual monomorphism may either select for or be an evolutionary consequence of a promiscuous mating system.