Energy and Water
Lightning Round SessionSunday, Jan. 3, 2027 8:00 AM - 10:00 AM (EST)
- Chair: Sydney Campbell, University of Hawaii
Do Lower Net Metering Payments Reduce Grid Exports? Evidence from U.S. Solar Utilities
Abstract
The rapid expansion of distributed renewable energy has reshaped U.S. electricity markets and policy. A central mechanism is net metering, which compensates households for excess electricity supplied to the grid. During the past decade, many states have reduced compensation rates for excess generation, creating a natural setting for studying how residential producers respond to price incentives.This paper examines how reductions in net metering compensation affect the quantity of electricity exported to the grid by residential solar customers. We construct a normalized measure—excess supply per installed metering capacity (ESBIMC)—using administrative data from the U.S. Energy Information Administration, scaling exported electricity by installed solar capacity to capture behavioral responses independent of system size.
We exploit staggered policy changes across utilities and states and estimate treatment effects using difference-in-differences models at both monthly and annual frequencies. To assess robustness to treatment timing heterogeneity, we complement our analysis with a synthetic difference-in-differences approach.
Preliminary results suggest limited average effects across most cohorts under parallel pre-trends, though dynamic responses are evident. The 2016 policy cohort exhibits a consistent post-treatment decline in ESBIMC. Synthetic DID estimates indicate an average reduction of approximately 6.7 monthly production-hours of exported electricity per unit of installed capacity. This corresponds to a significant decline relative to a pre-treatment mean of roughly 28.5 hours for this cohort.
These findings suggest that lower compensation rates have potential for households to shift toward self-consumption rather than grid export, with implications for utility demand, rate design, and the broader efficiency of distributed generation policies. By comparing estimates across standard and synthetic DiD frameworks in a staggered policy environment, we highlight the importance of estimator choice when treatment effects evolve dynamically over time.
Efficient Irrigation Technologies and Basin-scale Water Availability
Abstract
This study examines how the adoption of efficient irrigation technologies, particularly center-pivot sprinkler systems, affects water use and availability across multiple hydrological scales. While such technologies are widely promoted as a means to conserve water, their overall impact remains ambiguous due to potential behavioral responses by farmers. Using detailed data from the South Platte River Basin in Colorado, we analyze the effects of sprinkler adoption at the parcel, canal, and river basin levels.At the parcel level, we find that sprinkler adoption increases evapotranspiration (ET), a proxy for consumptive water use, suggesting that improved efficiency may lead to greater water consumption. This increase is partly driven by behavioral adjustments, including shifts toward more water-intensive crops such as alfalfa. However, at the canal level, sprinkler adoption is associated with a significant reduction in water diversions, indicating improved conveyance and application efficiency. Importantly, the magnitude of reduced diversions exceeds the increase in consumptive use. At the basin level, we find that greater upstream sprinkler adoption leads to increased downstream streamflow and a reduction in curtailment frequency, suggesting net water availability gains within the system. These findings highlight the importance of considering scale when evaluating irrigation efficiency technologies.
Our results reveal a relationship between irrigation efficiency and water conservation. While efficiency improvements may increase on-farm water consumption, they can simultaneously reduce system-level withdrawals and enhance downstream water availability. This study underscores the need for basin-scale perspectives in water policy design and cautions against relying solely on farm-level metrics when evaluating the impacts of irrigation technologies.
Permitting, Litigation Risk, and Energy Infrastructure Investment
Abstract
Legal risk arising from the permitting process may shape infrastructure development, but its magnitude and mechanisms are unclear. Using novel litigation data on environmental and land-use permits, I study this question in the context of renewable energy infrastructure. I find that litigation influences market entry through two pathways. Directly, a history of litigation deters renewable market entry by 4 percent at the mean entry rate through perceived risk, while legal precedent encourages entry by 9 percent by clarifying legal standards and reducing uncertainty. Indirectly, through regulatory agency responses, a history of litigation extends permit review timelines by 21 days on average and by 206 days following negative rulings, while legal precedent mitigates these delays. The informational clarity created by legal precedent generates non-rival, non-excludable spillovers, resembling a public good. Because developers bear private litigation costs while the benefits of clearer standards are shared market-wide, economic theory predicts under-investment in legal precedent. I develop a structural model to quantify permitting costs and assess the extent of this under-investment. The model estimates average permitting costs of $5.5 million, or 14 percent of expected project net profits. Counterfactual simulations show that a legal fee shifting scheme would increase market entry by 6.1 percent, compared to 3.4 percent from permitting cost reductions. Internalizing the externalities of legal precedent may accelerate renewable deployment more effectively than administrative reforms alone.Water Overallocation and Social Unrest: Evidence from Chilean Water Rights
Abstract
While climate-driven water scarcity is increasingly linked to conflict, the social consequences of demand-side pressures---rising extraction that depletes shared water resources---are far less understood. This paper examines how upstream water extraction affects downstream water availability and social conflict in Chile, a country that has undergone a massive expansion of water rights over recent decades driven largely by agricultural and mining industries. I combine geo-referenced surface and groundwater rights data for over 50,000 right-holders with yearly data on streamflows, legal water disputes, and protest events. Using a spatial spillover design that exploits river flow direction, I measure upstream extraction pressure as the ratio of rights allocated upstream to estimated baseline river flow. A 10% increase in this ratio reduces annual streamflow by 5.2% (0.44 m³/s) and summer streamflow by 5.7%. Effects follow channel-specific spatial gradients: surface water effects are larger for more distant upstream users, while groundwater effects are spatially concentrated near the extraction point. On the conflict side, the main contribution of the paper lies in the heterogeneity of social responses. Upstream pressure raises water theft lawsuits by 9% on average---but the conflict response is sharply heterogeneous: effects concentrate in overallocated basins where rights already exceed available water and any additional extraction directly displaces downstream users; in basins where upstream rights are concentrated in few, visible holders who become focal targets of public grievance; under severe drought, when attribution of scarcity to upstream extractors is most salient; and in mining-dominated areas, where communities lack formal legal recourse and mobilize publicly rather than through courts. Where water is not yet overcommitted, the same pressure is associated with fewer disputes. These findings suggest that the social stability consequences of water rights issuance depend not on aggregate extraction levels, but on whether cumulative allocation has already exhausted the resource.Building Energy Performance Standards: Impacts on Building Energy Efficiency and GHG Emissions in Washington, DC
Abstract
This study evaluates the causal impact of Washington, DC’s Building Energy Performance Standards (BEPS) on building energy efficiency and GHG emissions using a continuous DiD framework. Leveraging panel data on large public and private buildings from 2013–2023, the analysis exploits variation in treatment intensity measured by each building’s pre-policy compliance gap relative to BEPS thresholds. Results show that a one-unit increase in the compliance gap reduces Site EUI by 0.33 kBtu/ft² and Source EUI by 0.45 kBtu/ft², increases Energy Star scores by 0.41 points, and lowers total GHG emissions by 0.35 metric tons of CO₂e and emissions intensity by 0.65 kgCO₂e/ft². Event-study evidence confirms parallel trends and shows that effects intensify after the first binding compliance cycle in 2021. The findings indicate that BEPS delivers meaningful efficiency gains and emissions reductions, driven primarily by baseline noncompliance rather than building ownership status.Drought-Induced Deforestation in the Brazilian Amazon
Abstract
Recent literature highlights climate variability, particularly drought, as a critical yet understudied driver of forest loss in the Brazilian Amazon. Using high-resolution geospatial data, we show that increases in root-zone soil moisture deficits lead to higher deforestation within the same year, with no evidence of reverse within-year feedback from deforestation to moisture conditions based on moisture flow data. The effect is substantially larger in municipalities with a higher prevalence of family farms. Consistent with this pattern, these municipalities also receive more forest-related environmental fines during drought periods, suggesting greater engagement in illegal deforestation activities. We provide evidence on the underlying mechanism by showing that drought reduces agricultural output more sharply in these areas, indicating heightened economic distress. Finally, we find that improved access to credit partially mitigates drought-induced deforestation, pointing to a potential role for policy interventions in alleviating environmentally harmful coping responses.Federal Oversight and Water Quality under the Clean Water Act
Abstract
This paper studies the role of federal oversight in environmental regulation under cooperative federalism. I examine how declining EPA Clean Water Act oversight affected pollution from major wastewater treatment plants. The analysis combines plant-level inspection and discharge data from ICIS-NPDES with ambient monitoring data from the Water Quality Portal in a nationwide panel spanning 2004 to 2024. Identification exploits pre-determined variation in facilities’ exposure to the Total Maximum Daily Load (TMDL) regulatory framework to instrument for federal inspection intensity within an upstream-downstream design that isolates each plant’s marginal contribution to downstream water quality. I estimate how reduced federal oversight affects ambient pollution and whether weaker enforcement weakens the relationship between self-reported discharges and downstream water quality. The paper provides evidence on the deterrence value of federal enforcement beyond state-administered regulatory programs and on how declines in federal enforcement capacity affect environmental quality.Asset Reallocation under Cap-and-Trade: Evidence from the U.S. Power Sector
Abstract
This paper examines how state-level cap-and-trade programs influence asset reallocation in the U.S. power sector. Exploiting the introduction of the Regional Greenhouse Gas Initiative (RGGI) in 2009 and California’s Cap-and-Trade Program in 2013, I show that carbon pricing affects firms not only through operational adjustments but also through the market for power plants. Within regulated states, fossil-fuel power plants are significantly more likely to be divested, while renewable power plants are more likely to be retained. Firms with greater exposure to carbon pricing divest fossil-fuel plants more aggressively, although some buyers continue to acquire these assets, consistent with heterogeneity in upgrading capabilities. Asset reallocation also extends beyond regulated regions. Exposure to cap-and-trade leads firms to reduce fossil-fuel capacity and expand renewable capacity in unregulated states, particularly in geographically proximate and economically important markets. Carbon pricing also stimulates low-carbon innovation, facilitating renewable expansion outside regulated areas. Overall, the findings highlight asset markets as a central channel through which regional climate policy reshapes firms’ nationwide portfolios and redirects investment toward cleaner technologies.JEL Classifications
- Q2 - Renewable Resources and Conservation