Workshop on Energy and Environmental Research

UH Mānoa is particularly strong in energy, environment and resource policy, which often requires interdisciplinary research. This workshop is organized by UHERO and facilitates interaction among faculty and graduate students in UHERO, Economics, Engineering, NREM, DURP, SOEST and more. We also hope to draw participation from visitors and professional economists and policy analysts around the State. Work in progress is strongly encouraged!

Seminars will take place online over Zoom on Mondays from 12:00pm – 1:15pm. Subscribe to the WEER mailing list to receive the Zoom link and further information on upcoming sessions.

Class Credit:
Graduate students can obtain ECON 696 credit from Professor Roberts.

Fall 2020

Date Speaker Title Slides
24-Aug Michael Roberts Introduction to Workshop
31-Aug Makena Coffman and Sherilyn Hayashida Pathways to Decarbonization for O‘ahu: 2020-2045
7-Sept No Seminar (Labor Day)
14-Sept Nori Tarui Economic Impacts of Sea Level Rise and Coastal Management
21-Sept Reed Walker (Haas School of Business at UC Berkeley) Is Air Pollution Regulation Too Stringent?
28-Sept Matthias Fripp A benchmark renewable energy plan for performance-based regulation in Hawaii PDF
5-Oct Nick Hagerty (Montana State University) Adaptation to Water Scarcity in Irrigated Agriculture
12-Oct Sisi Zhang and Eleanor Yuan Using Temperature Sensitivity to Estimate Shiftable Electricity Demand
19-Oct Sarah Medoff Testing the Pollution Haven Hypothesis on the High Seas
26-Oct No Seminar
2-Nov Chris Wada Mountain-to-sea ecological-resource management: Forested watersheds,
coastal aquifers, and groundwater dependent ecosystems
9-Nov Nathan DeMaagd Tourism and water scarcity: The impact of hotels and vacation rentals on water resources
16-Nov Jonathan Eyer Breaking Into Industry for Economists (and their grad students)
23-Nov Marcus Peng What's a beach day worth? Economic valuation of Waikiki Beach
30-Nov Dongkyu Park The The Impact of Earthquake on Housing Prices near Nuclear Power Plants: Focusing on Kyungju City in Korea
7-Dec John Lynham FishNet: Species Classification and Size Regression for Stock Assessment using a Hand-Labelled Dataset of One Million Fish

Pathways to Decarbonization for O‘ahu: 2020-2045

Makena Coffman and Sherilyn Hayashida

Abstract

In 2018, City Council Resolution 18-221 requested the creation of a Climate Action Plan (CAP) to establish comprehensive milestones to transition O‘ahu to 100 percent renewable energy on the path to carbon neutrality by 2045. This presentation focuses on the variety of policies and programs that reduce GHG emissions, from 2020 to 2045, for O‘ahu. Decarbonization strategies are also assessed with public input from an island-wide representative survey.

Sea Level Rise Impacts on Property Value in Honolulu

Nori Tarui

Abstract

Sea level rise (SLR) associated with climate change will affect assets, their value, and land use decisions in many coastal areas around the world. Recent studies find that exposure to the risk of future SLR is associated with lower current property values in many coastal areas. In this study we apply property transaction data in the City & County of Honolulu (Oʻahu) between 1994 and 2019 to investigate the effect of current and expected SLR exposure on residential property prices. Using detailed state data on properties under various SLR scenarios (including bathtub modeling as well as considering impacts of seasonal wave run-up and exacerbated coastal erosion patterns), we find that exposed properties have already suffered negative impacts to transaction prices at around 8%. The estimated economic impacts provide implications to coastal management strategies as a climate change adaptation measure; and how alternative strategies such as managed retreat, managed buyback and coastal armoring compare in terms of relative benefits and costs.

Is Air Pollution Regulation Too Stringent?

Reed Walker (UC Berkeley) Working Paper Appendix

Abstract

This paper describes a new approach to estimating the marginal cost of air pollution regulation, then applies it to assess whether a large set of existing U.S. air pollution regulations are too stringent or lenient. The approach utilizes an important yet underexplored provision of the Clean Air Act requiring new or expanding plants to pay incumbents in the same or neighboring counties to reduce their pollution emissions. These “offset” regulations create hundreds of decentralized, local markets for pollution that differ by pollutant and location. We show how offset transaction prices can be interpreted as measures of the marginal cost of abatement, and we compare them to estimates of the marginal benefit of abatement from leading air quality models. We find that for most regions and pollutants, regulation is too lenient; marginal abatement costs are persistently and substantially below marginal abatement benefits. In at least one market, however, regulation is too stringent—the marginal costs of abatement significantly exceed the marginal benefits of abatement. Marginal abatement costs have increased in real terms by over 6 percent annually. Notably, our revealed preference estimates of marginal abatement costs differ enormously from typical engineering estimates. Theory and evidence suggest that using price rather than existing quantity regulation in these markets could increase social welfare.

A benchmark renewable energy plan for performance-based regulation in Hawaii

Matthias Fripp

Abstract

Hawaii recently adopted landmark laws requiring 100% renewable generation by 2045 and performance-based regulation of our electric utilities by 2021. The Hawaii Public Utilities Commission is now finishing a 2.5 year process to establish performance metrics and incentives for the Hawaiian Electric companies. I will give a brief overview of the issues addressed in this proceeding and discuss my role in this process. I will focus primarily on my work with the Ulupono Initiative to develop a forecast for the future design of the Oahu power system, for parties to use in benchmarking the financial effect of performance incentives on the utility. I will contrast this least-cost system design with a dirtier and costlier plan put forward by Hawaiian Electric. This will show some of the factors in play in performance-based ratemaking and highlight concerns to watch for as Hawaiian Electric moves ahead with integrated resource planning next year.

Adaptation to Water Scarcity in Irrigated Agriculture

Nick Hagerty

Abstract

How much can societies adapt to environmental change? I provide evidence on this question by studying the response of irrigated agriculture to surface water scarcity. To identify adaptation, I compare the long-run and short-run effects of water scarcity on cropping decisions, which I estimate using institutional variation in water allocation in California. First, I estimate long-run effects using spatial discontinuities in average water supplies at the borders between neighboring water utilities, where farmland is otherwise similar. Then, I estimate short-run effects using weather-driven fluctuations in water supplies from year to year. Using high-resolution satellite data on land use, I find that short-run water scarcity reduces crop area and crop revenue (as predicted by crop choices). Long-run water scarcity shifts land-use patterns in different ways but reduces predicted crop revenue by 85 percent as much as in the short run, implying adaptation is limited. Absent new investments or policy changes, future declines in surface water supplies are likely to notably reduce the land area and output of agriculture.

Using Temperature Sensitivity to Estimate Shiftable Electricity Demand

Sisi Zhang, Eleanor Yuan, Matthias Fripp, and Michael J. Roberts

Abstract

On a levelized basis, wind and solar photovoltaic are now among the least costly sources of power but have output that fluctuates with weather and sunlight. While cheaper batteries can help manage intermittency, many uses of electricity may be flexible in their timing, aided by demand-side thermal storage, especially heating and cooling. We estimate potentially shiftable heating and cooling demand by linking hourly electricity demand across the continental United States to fine-grained estimates of hourly temperature over space and time. We find a large share of potentially flexible demand, ranging from 1.3% to 47% depending on the time of day, season and balancing authority. Assuming half the temperature-sensitive demand is shiftable, average daily peak load can be reduced by 8% and daily base load can be increased by an average of 18.3%, and the standard deviation of demand within a day can be reduced by an average of 68.7%. A new rule issued by the Federal Energy Regulatory Commission may incentivize development of markets to enable this potential demand flexibility.

Testing the Pollution Haven Hypothesis on the High Seas

Sarah Medoff and John Lynham

Abstract

The stringency of environmental regulation of tuna production in the Pacific Ocean varies temporally, spatially, and cross-sectionally for US-registered firms. We use this variation, which is exogenous to changes in trade policy, to test a central tenet of the pollution haven hypothesis: more stringent environmental regulations causes firms to relocate to less regulated regions and may not reduce aggregate environmental harm. Double- and triple-difference tests on changes in daily production decisions provide causal evidence in support of the hypothesis. Firms relocate over 600 miles within a few weeks of new regulatory measures. We do not observe reductions in aggregate environmental damage and preliminary results suggest that, in some years, more stringent regulations cause more environmental harm than would be observed in the absence of these regulations.

Mountain-to-sea ecological-resource management: Forested watersheds, coastal aquifers, and groundwater dependent ecosystems

Christopher Wada

Abstract

Improving the understanding of connections spanning from mountain to sea and integrating those connections into decision models have been increasingly recognized as key to effective coastal resource management. In this paper, we aim to improve our understanding of the relative importance of linkages between a forested watershed, a coastal groundwater aquifer, and a nearshore marine groundwater-dependent ecosystem (GDE) using a dynamic groundwater optimization framework and simple ecosystem equations. Data from the Kiholo aquifer on the Kona Coast of Hawai’i Island are used to numerically illustrate optimal joint management strategies and test the sensitivity of those strategies to variations in physical and behavioral parameter values. We find that for a plausible range of watershed management costs, protecting part of the recharge capture area is always optimal. Without watershed protection, maintaining a safe minimum standard growth rate for a GDE-dependent marine indicator species, reduces net present value non-trivially, but optimal investment in watershed conservation offsets that potential reduction by 75%. In general, we find that optimal watershed management and groundwater pumping are most sensitive to changes in water demand growth and parameters that describe nearshore salinity.

Tourism and water scarcity: The impact of hotels and vacation rentals on water resources

Nathan DeMaagd

Abstract

In many parts of the world, tourism is beginning to have a negative effect on natural resource sustainability. This is particularly true of small, isolated islands whose economies rely heavily on tourism, but have limited sources of freshwater. In these cases, the islands often rely on freshwater aquifers with withdrawal rates potentially exceeding sustainable yield. Changes in future climate may put further strains on the aquifers if recharge from rainfall decreases. Our study follows others who have investigated tourism-heavy islands by examining the relationship between tourism and water use on the Hawaiian island of Oahu, while contributing to the literature in two key ways: (1) unlike other studies that focus on islands in developing countries, we focus on an island in a highly industrialized nation with much different demographics, economy, and institutions; and (2) to our knowledge, we are the first to separately consider the effects of traditional hotels and resorts, and the increasingly-popular transient vacation rentals like Airbnb, VRBO, and Home Away. Using a 7-year panel of monthly billing data, along with information gathered about tourism, hotels, and Airbnbs, we find hotel water use is positively associated with hotel occupancy, but there is no significant relationship between residential water use and Airbnb occupancy. Limitations of the study are considered, and potential strategies for water resource sustainability in light of global tourism growth are discussed.

Breaking Into Industry for Economists (and their grad students)

Jonathan Eyer

Abstract

Jonathan Eyer is an economist/data scientist at HP, Inc where he works on the Future Pricing Strategy team within the Pricing Analytics Center. The Pricing Analytics group serves as an internal consulting firm for internal HP stakeholders and customers, providing guidance on how to modify pricing behavior to meet strategic goals. The Future Pricing Strategy team provides an interface with newly developed data science and econometric approaches to consider “atypical” problems and to imagine new ways to model pricing and consumer behavior. He will provide an overview of how empirical economists can carve out a comparative advantage within the growing data science field. There will be discussion of the specific econometric and data science methods that are transferable, the soft skills that aren’t (typically) taught in grad school, and how to frame yourself to get through an HR screen and hiring committee. Prior to joining HP, Jonathan was a Research Assistant Professor at the University of Southern California’s Sol Price School of Public Policy where he focused on environmental and energy economics and risk.

What's a beach day worth? Economic valuation of Waikiki Beach

Marcus Peng

Abstract

Waikiki Beach is one of the leading tourism destinations around the world, and is a large economic driver of the Hawaii state economy. As an artificial beach, it requires ongoing management and intermittent beach renourishment, exacerbated by climate change and sea-level rise. As part of ongoing and public investment into this valuable recreational resource, it is important to understand the function and value of beach characteristics and the nearshore environment. We estimate the value of changes in the beach width and water quality by applying a stated preference discrete choice experiment. Outcomes can inform policy decisions and justify public expenditures for the maintenance and improvement of Waikiki Beach.

 

The The Impact of Earthquake on Housing Prices near Nuclear Power Plants: Focusing on Kyungju City in Korea

Dongkyu Park

Abstract

This study focused on estimating the willingness to pay for housing to measure the value of potential risk of Nuclear Power Plant (NPP) in Korea by using Hedonic price model. This paper employed house transaction data with difference-in-differences method for estimating the value of NPP by comparing the impacts of two exogenous shocks on housing prices near Gori NPP in South Korea. One is the Fukushima nuclear accident in 2011 and another is the earthquake of Pohang city in 2017. The Fukushima accident does not affect housing prices near the NPP. On the other hand, there was a long term negative effect for the Pohang earthquake. The result shows that the potential risk of the NPP is well reflected in South Korea real estate market after the Pohang earthquake.