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Managing Climate Change: Lessons from the U.S. Navy

August 1, 2017

[Harvard Business Review ] Forest Reinhardt and Michael Toffel: The United States Navy operates on the front lines of climate change. It manages tens of billions of dollars of assets on every continent and on every ocean. Those assets—ships, submarines, aircraft, naval bases, and the technology that links everything together—take many years to design and build and then have decades of useful life. Read more about Managing Climate Change: Lessons from the U.S. Navy

Environmental Economics – A Personal Perspective

July 31, 2017

[Robert Stavins' blog ] Today, I wish to take a brief hiatus from reflecting on the current status of climate change policy, whether in the often traumatic context of policy pronouncements – or rather, Twitter messages – from U.S. President Trump and his administration, or in the broader, longer-term context of global actions.  Rather, I want to seize on this mid-summer opportunity to think about the past rather than the present. Read more about Environmental Economics – A Personal Perspective

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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.

Recent Publications

Greenstone, Michael, Cass R. Sunstein, and Sam Ori. “The Next Generation of Transportation Policy.” Cambridge, Massachusetts, USA: Harvard Project on Climate Agreements, 2017.Abstract
Motor vehicle fuel-economy standards have long been a cornerstone of U.S. policy to reduce fuel consumption in the light-duty vehicle fleet. In 2011 and 2012 these standards were significantly expanded in an effort to achieve steep reductions in oil demand and greenhouse gas emissions through 2025, consistent with long-term U.S. policy goals. As a policy approach, however, standards that focus on efficiency alone, as opposed to lifetime consumption, impose unnecessarily high costs and do not deliver guaranteed petroleum savings. On the basis of a commitment to cost-benefit analysis, defining U.S. regulatory policy for more than 30 years, we propose a novel policy solution that would implement a cap-and-trade system in transportation. Acknowledging that the very idea of cap and trade has become controversial, we show that this approach would increase the certainty of reductions in fuel consumption in transportation and do so at a far lower cost per gallon avoided. Such an approach is consistent with the regulatory authority existing at key federal agencies.
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.

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