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Environmental Shocks, Adaptation, and Costs in the Developing World

Paper Session

Saturday, Jan. 7, 2023 8:00 AM - 10:00 AM (CST)

New Orleans Marriott, Galerie 1
Hosted By: Association of Environmental and Resource Economists
  • Chair: Olivier Deschênes, University of California-Santa Barbara

The Health Costs of Dirty Energy: Evidence from the Capacity Market in Colombia

Achyuta Adhvaryu
,
University of Michigan
Teresa Molina
,
University of Hawaii-Manoa
Anant Nyshadham
,
University of Michigan and NBER
Jorge Tamayo
,
Harvard Business School
Nicolas Torres
,
Good Business Lab

Abstract

The endogeneity of fuel choice makes it difficult to measure the health effects of “dirty” (fossil fuel driven) energy production. To deal with this endogeneity, we exploit an electricity policy in Colombia that generates a price-based trigger for the use of thermal energy sources. Using a difference-in-differences strategy that compares municipalities near high capacity and low capacity power plants, we first document that the activation of this trigger leads to significantly higher levels of pollution. We find that this switch to thermal energy increases ER mortality from cardiovascular disease by 54% and morbidity from respiratory disease by 10%.

Public Attention Reduced Forest Fires in the Brazilian Amazon

Francisco Costa
,
University of Delaware
Teevrat Garg
,
University of California-San Diego and IZA
Rafael Araujo
,
Climate Policy Initiative

Abstract

International frameworks and agreements to reduce anthropogenic environmental disasters rely
on international pressure driving local action. Although environmental catastrophes can
occasionally capture international attention, it is unclear if focused media and increased public
outcry can reduce environmental damage. We study the unusual and concentrated increase in
international scrutiny on forest fires in the Brazilian Amazon in August 2019. Comparing active
fires in the Brazilian Amazon versus those in the Peruvian and Bolivian Amazon before and after
a surge in public attention on the Brazilian Amazon, we find that increased public attention
reduced fires by 22% (93,607 avoided pixel-days of active fire) avoiding 24.81 million MtCO2
in emissions. Our results highlight the power of public pressure to compel governments to act on
pressing environmental issues, even in political contexts hostile to environmental priorities.

Climate Change and Intensification Effects: Evidence from Human Capital in India

Maggie Liu
,
U.S. Department of the Treasury
Vis Taraz
,
Smith College
Yogita Shamdasani
,
National University of Singapore and CEPR

Abstract

A growing literature documents that rising temperatures under climate change have negative and persistent impacts on human capital. The short-term adverse effects of climate change in developing economies could therefore be compounded by the dampening of human capital investment in the long term. In this paper, we examine how slow-onset changes in temperature affect human capital accumulation in Indian districts between 1951 and 2011. We find that rising temperatures experienced by cohorts during their schooling years are associated with lower literacy rates and reduced rates of secondary education attainment. These effects are concentrated in rural areas, and are more pronounced in the female population. Our results provide potential evidence of the intensifying effects of climate change on socio-economic outcomes in the long term.

Water, Water Everywhere and Not a Drop to Drink? Ocean Salinity, Early-Life Health, and Adaptation

James Ji
,
University of Florida
Amanda Guimbeau
,
University of Sherbrooke
Nidhiya Menon
,
Brandeis University and IZA
Zi Long
,
Brandeis University

Abstract

We study the effects of in utero exposure to climate change induced high ocean salinity levels on children’s anthropometric outcomes. Leveraging six geo-referenced waves of the Bangladesh Demographic and Health Surveys merged with gridded data on ocean salinity, ocean chemistry and weather indicators (temperature, rainfall and humidity) from 1993 to 2018, we find that a one standard deviation increase in in utero salinity exposure leads to a 0.11 standard deviation decline in height-for-age. Effects on weight-for-height and weight-for-age for a similar magnitude increase in salinity are 0.13 and 0.15 standard deviations, respectively. Analyses of parental investments and health-seeking behaviors demonstrate that there are relatively few compensating actions along these dimensions to attenuate the detrimental effects of salinity, especially among poorer households. Using satellite-sourced datasets on agriculture and land-use, we find that increasing salinity constrains farmers’ land use choices, leading to lower agricultural profitability. In particular, the effects of salinity on child health mainly originate in areas with lower agricultural intensity caused by the progressive salinization of productive lands. These results highlight the costs of environmental shocks on early-life health outcomes in vulnerable populations.

Discussant(s)
Shaoda Wang
,
University of Chicago
Tatyana Deryugina
,
University of Illinois-Urbana-Champaign
Kyle Emerick
,
Tufts University
Ahmed Mushfiq Mobarak
,
Yale University
JEL Classifications
  • Q5 - Environmental Economics
  • Q2 - Renewable Resources and Conservation