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Sheila Olmstead

EPA Science Advisory Board Member, LBJ School Professor Sheila Olmstead Talks Water Policy and Environmental Justice in Latest Episode of “Environmental Insights"

Suzi Kerr

EDF Chief Economist Suzi Kerr Discusses New Zealand’s ETS, the US’ New NDC, and CBAM in Latest Episode of “Environmental Insights”

September 8, 2021
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Learn about HEEP

HEEP is a university-wide initiative addressing today's complex environmental challenges and is based in the Harvard Kennedy School’s Mossavar-Rahmani Center for Business and Government. Learn more by reading director Robert Stavins' welcome message.

Environmental Insights Podcast

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Recent Publications

Ramelli, Stefano, Alexander Wagner, Alexandre Ziegler, and Richard Zeckhauser. “Investor Rewards to Climate Responsibility: Stock-Price Responses to the Opposite Shocks of the 2016 and 2020 U.S. Elections.” Harvard Environmental Economics Program, 2021.Abstract
Donald Trump’s 2016 election and his nomination of climate skeptic Scott Pruitt to head the Environmental Protection Agency drastically downshifted expectations on U.S. policy toward climate change. Joseph Biden’s 2020 election shifted them dramatically upward. We study firms’ stock-price movements in reaction. As expected, the 2016 election boosted carbon-intensive firms. Surprisingly, firms with climate-responsible strategies also gained, especially those firms held by long-run investors. Such investors appear to have bet on a ‘‘boomerang’’ in climate policy. Harbingers of a boomerang already appeared during Trump’s term. The 2020 election marked its arrival. (JEL G14, G38, G41)
Aldy, Joseph E., Giles Atkinson, and Matthew Kotchen. “Environmental Benefit-Cost Analysis: A Comparative Analysis Between the United States and the United Kingdom.” Cambridge, Massachusetts, USA: Harvard Environmental Economics Program, 2021.Abstract
The United States and United Kingdom have longstanding traditions in use of environmental benefit-cost analysis (E-BCA). While there are similarities between how E-BCA is utilized, there are significant differences too, many of which mirror ongoing debates and recent developments in the literature on environmental and natural resource economics. We review the use of E-BCA in both countries across three themes: (a) the role of long-term discounting; (b) the estimation and use of carbon valuation; and, (c) the estimation and use of the value of a statistical life. In each case, we discuss how academic developments are (and are not) translated into use and draw comparative lessons. We find that, in some cases, practical differences in E-BCA can be overstated, although in others these seem more substantive. Advances in the academic frontier also raise the question of when and how to update practical E-BCA, with very different answers across our themes.
Aldy, Joseph, Matthew Kotchen, Mary Evans, Meredith Fowlie, Arik Levinson, and Karen Palmer. “Co-Benefits and Regulatory Impact Analysis: Theory and Evidence from Federal Air Quality Regulations.” Discussion Paper (2021): 45.Abstract
This paper considers the treatment of co-benefits in benefit-cost analysis of federal air quality regulations. Using a comprehensive data set on all major Clean Air Act rules issued by the Environmental Protection Agency over the period 1997-2019, we show that (1) co-benefits make up a significant share of the monetized benefits; (2) among the categories of co-benefits, those associated with reductions in fine particulate matter are the most significant; and (3) co-benefits have been pivotal to the quantified net benefit calculation in nearly half of cases. Motivated by these trends, we develop a simple conceptual framework that illustrates a critical point: co-benefits are simply a semantic category of benefits that should be included in benefit-cost analyses. We also address common concerns about whether the inclusion of co-benefits is problematic because of alternative regulatory approaches that may be more cost-effective and the possibility for double counting.
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News from the Harvard Project on Climate Agreements

Upcoming Events

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HPCA Conversations on Climate Change and Energy Policy

The Harvard Project on Climate Agreements is conducting a series of virtual forums addressing key issues in climate-change and related energy policy. Each forum will feature an expert guest and will be moderated by Robert Stavins, Director of the Harvard Project. 

We hope you can join us!

Next Scheduled Event: 

TBD

To access recordings and transcripts of past events, please go to the HPCA Conversations Series webpage.

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