# HEEP Faculty Fellow Named to National Academy of Sciences

June 14, 2017
Ariel Pakes, Faculty Fellow of HEEP and Thomas Professor of Economics in the Department of Economics at Harvard University was elected to the National Academic of Sciences (NAS) along with seven other Harvard University faculty. A total of 105 individuals were recognized by the NAS this year. More information is available in the Harvard Gazette article.

# Program Director Robert Stavins is Co-recipient of the Publication of Enduring Quality Award

June 13, 2017

The Publication of Enduring Quality (PEQ) award of the Association of Environmental and Resource Economists (AERE) recognizes works that are of seminal nature and with enduring value in environmental and resource economics. This year, AERE recognized two influential empirical papers on induced innovation in environmental economics: "The Induced Innovation Hypothesis and Energy-Saving Technological Change," by Richard G. Newell, Adam B. Jaffe, and Robert N. Stavins, Quarterly Journal of Economics, Vol. 114, No. 3 (1999), pp. 941–975; and "Induced Innovation and Energy Prices," by David Read more about Program Director Robert Stavins is Co-recipient of the Publication of Enduring Quality Award

# 2017 Placements for Recently-Graduated Fellows

June 6, 2017

Four Harvard Environmental Economics Program Pre-Doctoral Fellows, who graduated in May 2017, have accepted new positions:

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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.

## Recent Publications

Baker, Jonathan. “Subsidies for Succulents: Evaluating the Las Vegas Cash-for-Grass Rebate Program.” Cambridge, Massachusetts, USA: Harvard Environmental Economics Program, 2017.Abstract
I estimate the water savings and property value effects of a Las Vegas area water conservation program that subsidizes conversions of lawn to desert landscape. Using event studies and panel fixed-effects models, I find that the average conversion reduces baseline water consumption by 21 percent and increases property values by about 1 percent. In addition, my results show that water savings remain relatively stable over time; that water savings are inversely proportional to annual program take-up; that participants with high pre-conversion water demand save more water than participants with lower pre-conversion water demand; and that a 6 percent price increase would have achieved equivalent savings. I find little evidence of property value spillovers to neighboring properties. The program saves water at an annual rate of \$4.84/kgal and if I include an estimate of the scarcity value of water, generates net benefits of \$2.00 per square foot of desert landscape converted.
Park, Jisung. “Will We Adapt? Labor Productivity and Adaptation to Climate Change.” Cambridge, Massachusetts, USA: Harvard Environmental Economics Program, 2017.Abstract

This study explores the for labor-related production impacts of temperature stress both for its own interest and to understand the scope for adaptation to climate change. Focusing on non-agricultural output, I find that hot temperature exerts a significant causal impact on local labor product, with substantially larger effects in highly ex-posed industries such as construction, manufacturing, and transportation. Places that experience more extreme heat exposure in expectation (e.g. Houston, Orlando) exhibit lower impacts per hot day than cooler regions (e.g. Boston, San Francisco). A year with 10 additional 90°F days would reduce output per capita in highly exposed sectors by -3.5% in counties in the coldest quintile and -1.3%, roughly a third, in the warmest quintile. County-level air-conditioning penetration explains a large proportion of these differences. While these estimates suggest adaptation to heat stress in the long-run, they also imply realistic limits, at least given current technologies.

Weitzman, Martin L.On a World Climate Assembly and the Social Cost of Carbon.” Cambridge, Massachusetts, USA: Harvard Environmental Economics Program, 2016.Abstract

This paper postulates the conceptually useful allegory of a futuristic "World Climate Assembly" (WCA) that votes for a single worldwide price on carbon emissions via the basic democratic principle of one-person one-vote majority rule. If this WCA framework can be accepted in the first place, then voting on a single internationally-binding minimum carbon price (the proceeds from which are domestically retained) tends to counter self-interest by incentivizing countries or agents to internalize the externality. I attempt to sketch out the sense in which each WCA-agent's extra cost from a higher emissions price is counter-balanced by that agent's extra benefit from inducing all other WCA-agents to simultaneously lower their emissions in response to the higher price. The first proposition of this paper derives a relatively simple formula relating each emitter's single-peaked most-preferred world price of carbon emissions to the world "Social Cost of Carbon" (SCC). The second and third propositions relate the WCA-voted world price of carbon to the world SCC. I argue that the WCA-voted price and the SCC are unlikely to differ sharply. Some implications are discussed. The overall methodology of the paper is a mixture of mostly classical with some behavioral economics.

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