Resources for the Future

Washington, DC, United States

Resources for the Future

Washington, DC, United States
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As the Trump administration considers a rollback of strict Obama-era fuel standards, which aimed to reduce greenhouse gas emissions from the transportation sector, a recent study has provided a new argument in their favor: They might actually save lives. One common way automakers improve the fuel efficiency of their vehicles — that is, how much gasoline they consume per mile — is to reduce the weight of the automobile. And the new study, a working paper published by the National Bureau of Economic Research in April, suggests that a reduction in the overall average weight of vehicles on the road may actually result in fewer fatalities as a result of car crashes. This means that, even for critics who are not interested in reducing greenhouse gases from cars, there’s still an argument to be made for keeping vehicle fuel standards, said Antonio Bento, an environmental economics expert at the University of Southern California and one of the study’s co-authors. “What the paper shows is that even if those environmental benefits are very, very low, if nothing else, from a safety reason, you have a reason to move forward with the standards,” he said. The federal Corporate Average Fuel Economy, or “CAFE” standards, were first introduced in the United States in 1975. In 2012, the Obama administration approved a more stringent set of standards, which would steadily increase the efficiency of certain vehicles through 2025. The standards also changed some of the ways efficiency requirements are applied to cars of different sizes. Facing opposition from the automobile manufacturing industry, the administration later conducted a review of the standards but concluded at the end of 2016 that they would remain in place. However, the Trump administration decided in March to reopen this review — meaning it could decide to weaken or remove the Obama administration’s update. [Trump’s review of car fuel standards could lead to fight with California, environmentalists] Pushback against the CAFE standards is hardly new. Over the decades, industry members and other critics have levied a variety of arguments against them, and one of the most common from the beginning has been the idea that fuel standards sacrifice safety. Many critics have suggested that lighter-weight cars — which are typically more fuel efficient — are more likely to produce fatalities in an crash. This may indeed be the case if you’re looking at a weight change in only one car. Say you observe a crash between two SUVs, both around the same size. If you downsize one of those vehicles to a Smart car, the chance of its passengers being injured or killed may increase. On the other hand, if you downsize both vehicles, the overall risk of fatality might actually become smaller than it was to begin with. The researchers argue that, in the past, critics have only examined the effects of reducing an individual vehicle’s weight and not the standards’ overall effects on all vehicles in circulation — an important distinction. “What CAFE actually does is it doesn’t just lower the weight of one vehicle,” said Kevin Roth, an environmental economist at the University of California at Irvine and another co-author of the study. “It changes the entire composition of the fleet.” The researchers (who included Bento, Roth and co-author Kenneth Gillingham of Yale University) focused their study on two effects of the original CAFE standards: a reduction in the average weight of all vehicles on the road and a change in the dispersion of their weight — that is, how much variation there is in the weight of individual cars. Dispersion is what really causes safety problems, the researchers note. If you think about the scenario with the SUV and the Smart car, the problem wasn’t just that the Smart car, by itself, is a lightweight vehicle — it’s that it was pitted against a much heavier one. Automakers’ responses to fuel economy standards tend to produce a reduction in the average weight of vehicles on the road, as well as an increase in their weight dispersion. The relevant safety question, then, is whether an increase in weight dispersion, or a decrease in mean weight, is the more dominant outcome. To investigate, the researchers analyzed data on vehicles sold in the United States between 1954 and 2005 to see how their weight changed after the original CAFE standards were introduced in 1975. Next, they collected police reports on 17 million car crashes across 13 states between 1989 and 2005, noting which ones produced fatalities and the weights of the vehicles involved. Finally, the researchers conducted a series of simulations to see how these crashes might have turned out if the original CAFE standards had not been introduced and the vehicles’ weights had not been adjusted. The simulations suggested that 171 to 439 fewer fatalities occurred each year with the standards in place than without them, depending on factors such as the year and the location of the crashes. “I think one of the findings of this study is that these [safety] concerns have been drummed up as the reason to get rid of this standard,” Roth said. “We’re essentially showing that these concerns are probably overblown.” In fact, some of the changes the Obama administration made to the CAFE standards were designed to address safety concerns, according to Joshua Linn, a senior fellow at environmental research nonprofit Resources for the Future. (Linn was not involved with the new study but has provided comments on the working paper to the authors.) The study suggests that, in reality, this was probably never actually a problem, he said. However, the new study addresses only the effects of the original CAFE standards — not the Obama administration’s update, which may take years to produce noticeable changes in the composition of vehicles on the road, Roth noted. This means that the researchers can’t say for certain that their findings apply to the Obama standards under review. But they may suggest that “there’s no reason to think that removing the standards is going to improve safety on the road,” Roth said. It remains to be seen whether the safety argument will become a major point in the talks about the CAFE standards’ future under the Trump administration. So far, many of these discussions have revolved around the costs and logistics manufacturers face in complying with the current rules. Last week, automakers reportedly met with the heads of the Transportation Department and Environmental Protection Agency to discuss some of these issues. And it may be that the Obama standards are adjusted rather than removed. However, should a rollback begin to appear imminent, “then actually our study could become incredibly influential in the sense that our study looks at a historical perspective on the standards,” Bento said. “You start measuring what would happen if you were to truly remove or to lower the standards, potentially.”


Epanchin-Niell R.S.,Resources for the Future | Wilen J.E.,University of California at Davis
Journal of Environmental Economics and Management | Year: 2012

This study examines the spatial nature of optimal bioinvasion control. We develop a spatially explicit two-dimensional model of species spread that allows for differential control across space and time, and we solve for optimal spatial-dynamic control strategies. The qualitative nature of optimal strategies depends in interesting ways on aspects of landscape and invasion geometry. For example, reducing the extent of exposed invasion edge, through spread, removal, or strategically employing landscape features, can be optimal because it reduces long-term containment costs. Optimal invasion control is spatially and temporally "forward-looking" in the sense that strategies should be targeted to slow or prevent the spread of an invasion in the direction of greatest potential long-term damages. These spatially explicit characterizations of optimal policies contribute insights and intuition to the largely nonspatial literature on controlling invasions and to understanding control of spatial-dynamic processes in general. © 2011 Elsevier Inc.


Kousky C.,Resources for the Future
Climatic Change | Year: 2014

As sea level rises, coastal communities will face increased risks of flooding, storm surge, and inundation. In some areas, structural protective measures will be built, and for some properties, accommodation to sea level rise may be possible. For other areas, however, some form of retreat will be either preferred on economic or sociopolitical grounds or required given fiscal constraints. This paper considers how society can proactively manage shoreline retreat in those locations where it is deemed the preferable policy. A three-part strategy is proposed: (1) reduce new development in the highest-risk areas; (2) adopt policies that allow for expected and orderly removal or modification of development as inundation occurs; and (3) take advantage of disasters to implement managed retreat approaches. Specific policies are recommended and the challenges of institutional change discussed. © 2014 Springer Science+Business Media Dordrecht.


Rigorous, objective evaluation of forest conservation policies in developing countries is needed to ensure that the limited financial, human, and political resources devoted to these policies are put to good use. Yet such evaluations remain uncommon. Recent advances in conservation best practices, the widening availability of high-resolution remotely sensed forest-cover data, and the dissemination of geographic information system capacity have created significant opportunities to reverse this trend. This paper provides a nontechnical introduction and practical guide to a relatively low cost method that relies on remote sensing data to support ex post analysis of forest conservation policies. It describes the defining features of this approach, explains the broad empirical challenges to using it and the main strategies for meeting these challenges, catalogs the literature, discusses the requisite data, provides some practical guidance on modeling choices, and describes in detail two recent studies. © 2013 Elsevier B.V.


Fischer C.,Resources for the Future | Fox A.K.,ITC Inc
Journal of Environmental Economics and Management | Year: 2012

We explore conditions determining which anti-leakage policies might be more effective complements to domestic greenhouse gas emissions regulation. We consider four policies that could be combined with unilateral emissions pricing to counter effects on international competitiveness: a border charge on imports, a border rebate for exports, full border adjustment, and domestic output-based rebating. Each option faces different potential legal hurdles in international trade law; each also has different economic impacts. While all can support competitiveness, none is necessarily effective at reducing global emissions. Nor is it possible to rank order the options; effectiveness depends on the relative emissions rates, elasticities of substitution, and consumption volumes. We illustrate these results with simulations for the energy-intensive sectors of three different economies, the United States, Canada and Europe. Although most controversial, full border adjustment is usually most effective, but output-based rebating for key manufacturing sectors can achieve many of the gains. © 2012 Elsevier Inc.


Kousky C.,Resources for the Future
Energy Economics | Year: 2014

This paper reviews the empirical literature on the economic impacts of natural disasters to inform both the modeling of potential future climate damages and climate adaptation policy related to extreme events. It covers papers that estimate the short- and/or long-run economic impacts of weather-related extreme events as well as studies identifying the determinants of the magnitude of those damages (including fatalities). The paper also reviews the small number of empirical papers on the potential extent of adaptation in response to changing extreme events. © 2013 Elsevier B.V.


Fischer C.,Resources for the Future
Energy Journal | Year: 2010

Some studies of renewable portfolio standards find that regulations increase electricity generation costs; others find that the reduced demand for nonrenewable energy sources lowers natural gas prices and that electricity prices follow. This paper presents reasons for why these predictions can varyin the direction as well as the magnitude of their effects. The two driving factors are the elasticity of electricity supply from renewable energy sources relative to nonrenewable ones and the effective stringency of the target. The availability of other baseload generation helps to determine that stringency, and demand elasticity influences only the magnitude of the price effects, not the direction of those effects. The paper also evaluates circumstances under which higher standards can decrease both certificate prices and renewable energy supply. Sensitivity analysis indicates that assumptions about renewable energy supply slopes are more important than those about nonrenewable supplies in predicting the retail price impacts of renewable portfolio standards. Copyright © 2010 by the IAEE.


Fell H.,Resources for the Future
Energy Journal | Year: 2010

A cointegrated vector autoregressive (CVAR) model is estimated to determine the dynamic relationship between Nordic wholesale electricity prices and EU emissions trading scheme (EU-ETS) CO2 allowance prices. An impulse response analysis reveals that electricity prices have large short-term responses to CO2 price shocks, but that this response dampens over time. Using hourly Nordic electricity spot market prices, I find that the value of short-term response of electricity prices to a shock in CO2 prices in off-peak hours is consistent with expected values for near complete pass-through of CO2 emission costs when coal-generated power is at the margin. Likewise, the estimates reveal that peak hour electricity price responses to CO2 price shocks are as expected for a market that has near complete pass-through of CO2 emission costs when natural gas-generated power is at the margin. These results further suggest the Nordic electricity market is pricing as a competitive market. Copyright © 2010 by the IAEE. All rights reserved.


Kousky C.,Resources for the Future
Review of Environmental Economics and Policy | Year: 2011

This article surveys state-mandated programs in the United States aimed at providing natural catastrophe insurance to property owners and businesses unable to find policies in the private market. The article provides an overview of ten state programs that offer wind or earthquake coverage and outlines the motivation for establishing such programs. The implications of design and operation decisions, such as pricing strategies and contract options, are discussed, as well as how these programs interact with the private property insurance market. Finally, the article examines whether such programs can handle a truly catastrophic loss year and describes proposals for federal support of these programs. © The Author 2011. Published by Oxford University Press on behalf of the Association of Environmental and Resource Economists. All rights reserved.


Blackman A.,Resources for the Future
Ecological Economics | Year: 2015

Although protected areas, or "parks", are among the leading policy tools used to stem tropical deforestation, rigorous evaluations of their effectiveness-that is, evaluations that control for their tendency to be sited in remote areas with relatively little deforestation-have only recently begun to appear. Important open questions concern the link between the stringency of protection and park effectiveness. How do mixed-use parks that allow sustainable extractive activities perform relative to strictly protected parks? And what types of mixed-use management perform best? In addressing these questions, it is particularly important to control for nonrandom siting, since different management regimes tend to be sited in areas with different preexisting characteristics. To date, most rigorous studies of this issue have focused on scores of parks in one or multiple countries, a strategy that in principle could be undermined by unobserved park heterogeneity. This paper uses high-resolution 2001-2006 land cover data derived from satellite images along with statistical techniques that control for nonrandom siting to examine the relative effectiveness of strict and various mixed-use protection strategies in a single large park: the two-million-hectare Maya Biosphere Reserve in Guatemala. Our results comport with the emerging consensus that on the whole, mixed-use protection in this park has been more effective in stemming deforestation than strict protection because of the performance of forest concessions within the multiple-use zone. However, we also find that mixed-use protection has had smaller, more heterogeneous effects than indicated by simple methods that do not control for nonrandom siting. © 2015 Elsevier B.V.

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