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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 at the Miller Room. The seminar can also be attended online via 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.

Spring 2024

Date

Speaker

Title

Abstract

February 12
Anders Dugstad
(Postdoctoral scholar, Natural Resource and Envrionmental Management)
The Impact of Choice Architecture on Preferences for Environmental Goods: An Experimental Study of Attribute Translations and Signposting
View
February 19
Holiday: President's Day
February 26
Sarah Johnston
(University of Wisconsin at Madison)
An Empirical Analysis of the Interconnection Queue
View
March 4
Michael Roberts
(UH Manoa)
A CO2 Abatement Cost Function for the U.S. Electricity Sector
View
March 11
TBA
March 18
Spring Break
March 25
Anna E. Russo
(MIT)
Additionality and Asymmetric Information in Environmental Markets: Evidence from Conservation Auctions
View
April 1
Abigail Ostriker
(Harvard)
The Effects of Floodplain Regulation on Housing
View

The Impact of Choice Architecture on Preferences for Environmental Goods: An Experimental Study of Attribute Translations and Signposting

Anders Dugstad

Abstract: (View Paper)
This study explores the concept of choice architecture and attribute translations in high-stake public management. Attribute translations refer to various ways attributes of private and public goods can be described or measured. These translations capture different utility and disutility aspects and assist decision-makers in aligning their preferences with potentially overlooked objectives and personal values. Attribute translations function as cognitive cues or signposts that remind decision-makers of their objectives. However, limited research exists on the prevalence and implications of signpost effects, especially for the public good provision. We present a novel formalized theoretical framework that motivates hypotheses regarding attribute translations as a choice architectural tool on decision-makers’ preferences. Furthermore, we report findings from a large-scale experiment that empirically examines the impact of manipulating the representation of a key contextual attribute. Our analysis demonstrates that attribute translations can activate congruent objectives and lead to predictable shifts in preference expressions. Additionally, individuals with strong pre-existing personal values that align with a specific attribute translation exhibit a more pronounced shift, indicating increased salience and influence of congruent objectives in decision-making. We further find that experimental variation in the presentation of attribute translations have impacts on choice certainty and stochasticity in decision-makers’ choices. These findings highlight the importance of investigating choice architecture and attribute translations to inform crucial public management and policy decisions. However, further research is needed to generalize these effects.

An Empirical Analysis of the Interconnection Queue

Sarah Johnston

Abstract: (View Paper)
Generators applying to connect to the U.S. power grid go through an interconnection queue. Most wind and solar generators that begin the process do not complete it. Using new data, we find that a long queue increases the average waiting time, and high interconnection costs are a key factor in a generator’s decision to withdraw. We develop and estimate a dynamic model of the queue and quantify the effects of policy reforms. Our simulations indicate that reducing waiting times can significantly increase completions. An alternative queuing mechanism can therefore increase completed capacity by removing certain generators to reduce congestion. A flat entry fee has a similar effect. We also quantify the effects of reforming how interconnection costs are assessed. These policy reforms lead to a substantial reduction in carbon emissions.

A CO2 Abatement Cost Function for the U.S. Electricity Sector

Michael Roberts

Abstract:
We use Switch, a high-resolution, open-source model of the electricity sector of the continental United States, to devise least-cost power systems under CO2 emissions targets ranging from current emissions to zero emissions, in each case assuming electricity demand grows by more than two-thirds to meet emerging demand from electric vehicles and electrification of heat by 2050. The results characterize an abatement cost function for decarbonizing the electricity sector, which is central to decarbonization efforts. We then explore how a range of critical or controversial factors shift the abatement cost curve, including (a) limited transmission expansion, (b) a change in interest rates, (c) limited but efficient demand response, (d) restrictions on solar, wind, and battery use, (e) and restrictions on nuclear power. While we have not yet completed solving all scenarios at this stage, we will present preliminary findings for many of them and elicit feedback for other factors we might consider. The results should paint a holistic picture of the overall costs of the decarbonization challenge as well as the tradeoffs associated with different decarbonization pathways.

Additionality and Asymmetric Information in Environmental Markets: Evidence from Conservation Auctions

Anna E. Russo

Abstract: (View Paper)
Market mechanisms aim to deliver environmental services at low cost. However, this objective is undermined by participants whose conservation actions are not marginal to the incentive — or “additional” — as the lowest cost providers of environmental services may not be the highest social value. We investigate this potential market failure in the world’s largest auction mechanism for ecosystem services, the Conservation Reserve Program, with a dataset linking bids in the program’s scoring auction to satellite-derived land use. We use a regression discontinuity design to show that three of four marginal winners of the auction are not additional. Moreover, we find that the heterogeneity in counterfactual land use introduces adverse selection in the market. We then develop and estimate a joint model of multi-dimensional bidding and land use to quantify the implications of this market failure for the performance of environmental procurement mechanisms and competitive offset markets. We design alternative auctions with scoring rules that incorporate the expected impact of the auction on bidders’ land use. These auctions increase efficiency by using bids and observed characteristics to select participants based on both costs and expected additionality.

The Effects of Floodplain Regulation on Housing

Abigail Ostriker

Abstract: (View Paper)
We investigate the effects of housing regulations designed to correct a wedge between privately- and socially-optimal construction in areas at risk of flooding in Florida. Using a spatial regression discontinuity around regulatory boundaries and an event study around the policy’s introduction, we document that floodplain regulation reduces new construction in high-risk areas and increases the share of newly-built houses that are elevated. Embedding these effects in a model of residential choices with elastic housing supply, we find that the policy reduces expected flood damages by 60%. One-quarter of this reduction is driven by relocation of new construction to lower-risk areas, and three-quarters is driven by elevation of houses remaining in risky areas. However, this second-best policy achieves at best about one-tenth of possible welfare gains because of poor targeting. It overcorrects in many areas, inducing more consumers to elevate and relocate than is socially-optimal, while still allowing inefficiently-high construction in the riskiest places. By contrast, a flexible corrective tax on flood risk would achieve substantial welfare gains of more than $2,700 per newly-developed house.

Economics of Biological Invasion and Invasive Plant Management in Range Lands: A Case Study of Hound’s Tongue (Cynoglossum officinale) in British Columbia

Rupananda Widanage

Abstract:
The exotic plant known as the hound’s tongue (Cynoglossum officinale) invades rangelands in British Columbia (BC) and creates economic welfare losses to ranchers and the broader society through declining rangeland productivity, recreation opportunities, and soil fertility. In addition to such adverse effects, the hound’s tongue also disperses “burrs” that infest cattle and reduce their market value. I assume that a representative rancher attempts to maximize the profits from livestock sales subject to the growth of the hound’s tongue in nearby rangelands. We develop a bio-economic model to demonstrate this management problem and derive the optimal allocation of labour for pulling the hound’s tongue and the area of infested land at a steady state. My research findings show that the private steady-state equilibrium is not considerably different from the social steady-state equilibrium. Furthermore, a private rancher may be willing to control the hound’s tongue in the neighbouring rangelands once the marginal benefits from controlling the hound’s tongue in his or her own rangeland become less than the marginal benefits of controlling the hound’s tongue in the neighbouring public rangeland. Under such circumstances, government intervention to control the hound’s tongue may yield few incremental social benefits. The findings of this study may have implications for the design of invasive plant management strategies. Instead of direct government intervention, offering incentives to private ranchers may be appropriate for controlling invaders such as hound’s tongue in rangelands in BC or elsewhere. If the intent of the invasive plant management strategy is to provide support to ranchers more generally, then this may be better achieved via other means.

Can Removing Development Subsidies Promote Adaptation? The Coastal Barrier Resources System as a Natural Experiment

Hannah Druckenmiller

Abstract:
As natural disasters grow in frequency and intensity under climate change, limiting populations and properties in harm’s way will be one important facet of adaptation. This paper examines the Coastal Barrier Resources Act of 1982, which eliminated federal incentives for development in designated areas along the Atlantic and Gulf coasts known as the Coastal Barrier Resources System (CBRS). We introduce a new research design to estimate the causal effect of the policy that identifies plausible counterfactual areas using machine learning and matching techniques. We find that CBRS designations lower development density by 85% inside the designated areas, but increase development in neighboring areas by 20%. We also present new evidence on flood protection benefits, property values, and changes in demographic characteristics in the affected areas. Our results inform ongoing debates regarding cost-effective policy options for discouraging over-development in areas at risk of climate change.

How Important is Transmission Expansion to Decarbonization of the U.S. Electricity Sector?

Rangrang Zhang

Abstract:
Solar and wind power are now cheaper than fossil fuels but are intermittent. The extra supply-side variability and great geographic heterogeneity in land, wind, and solar resource potential, could make long-distance transmission between regions more valuable in a decarbonized electricity system as compared to conventional systems dominated by controllable and more easily sited thermal power plants. We evaluate the potential gains of optimizing transmission expansion within and between the three major interconnects of the United States using a high-resolution, open-source model that jointly optimizes investments in transmission, storage, generation, and hourly operations for the contiguous United States. Although transmission expansion is more valuable in a high-renewable system than a conventional system, we find that optimal nationwide expansion reduces cost of a 100% clean system by less than 3 percent. Most of these savings can be achieved without expansion between the three interconnects. Energy storage can leverage existing transmission to achieve clean power systems at relatively modest cost.

Time-of-Use Electricity Pricing: Implications of Hawai'i's Pilot Program

Ethan Hartely

Abstract:
Hawaiian Electric Company is about to embark on a significant experiment: a pilot program introducing time-of-use (TOU) pricing. Designed to reduce electricity prices during daylight hours when solar power is abundant and increase them during the evening when the sun sets, and demand rises, this initiative could reshape how 17,000 customers consume energy. If you’re among the chosen, you’ll be automatically enrolled unless you opt out. While the pilot might benefit many customers, those with roof-top solar, who are over-represented in the pilot, will likely see considerably higher bills unless they opt out. More profound changes in rate design are needed to entice rooftop solar customers to participate in variable pricing programs and to limit the extent to which rooftop solar customers’ savings represent a cost shift to other customers.

Building the Prototype Census Environmental Impacts Frame

John Voorheis

(View Paper)

Abstract:
The natural environment is central to all aspects of life, but efforts to quantify its influence have been hindered by data availability and measurement constraints. To mitigate some of these challenges, we introduce a new prototype of a microdata infras tructure: the Census Environmental Impacts Frame (EIF). The EIF provides detailed individual-level information on demographics, economic characteristics, and address level histories – linked to spatially and temporally resolved estimates of environmental conditions for each individual – for almost every resident in the United States over the past two decades. This linked microdata infrastructure provides a unique platform for advancing our understanding about the distribution of environmental amenities and hazards, when, how, and why exposures have evolved over time, and the consequences of environmental inequality and changing environmental conditions. We describe the construction of the EIF, explore issues of coverage and data quality, document patterns and trends in individual exposure to two correlated but distinct air pollutants as an application of the EIF, and discuss implications and opportunities for future research.

Sea-Level Rise, Drinking Water Quality and the Economic Value of Coastal Tourism in North Carolina

John Whitehead

(View Paper)

Abstract:
We estimate economic benefits of avoiding reductions in drinking water quality due to sea level rise accruing to North Carolina (NC) coastal tourists. Using stated preference stated preference methods data with recent coastal visitors, we find that tourists are 2%, 8%, and 11% less likely to take an overnight trip if drinking water tastes slightly, moderately, or very salty at their chosen destination. The majority of those who decline a trip would take a trip to another NC beach without water quality issues, others would take another type of trip, with a minority opting to stay home. Willingness to pay for an overnight beach trip declines with the salty taste of drinking water. We find evidence of attribute non-attendance in the stated preference data, which impacts the regression model and willingness to pay for trips. Combining economic and hydrology models, annual aggregate welfare losses due to low drinking water quality could be as high as $401 million, $656 million and $1.02 billion in 2040, 2060 and 2080.

The Social Value of Hurricane Forecasts

Renato Molina

(View Paper)

Abstract:
What is the impact and value of hurricane forecasts? We study this question us- ing newly-collected forecast data for major US hurricanes since 2005. We find that higher wind speed forecasts increase pre-landfall protective spending, but erroneous under-forecasts increase post-landfall damage and rebuilding costs. We develop a theoretically-grounded approach for estimating the marginal value of forecast improve- ments and find that the average annual improvement reduces total per-hurricane costs by over $400,000/county. Improvements since 2007 reduced costs by 18%, totalling billions of dollars per hurricane. This exceeds the annual budget for all federal weather forecasting in the US.

Is a Photo Worth 1,000 Likes? The Influence of Instagram at National Parks

Ashley Lowe MacKenzie

Abstract:
The rise of social media platforms has led to many facets of society that may now be impacted, directly or indirectly, by online behavior and content. One hypothesis posited in the news media is that social media, Instagram in particular, is driving increases in visitation to public lands. Using millions of georeferenced posts to Instagram from 2012 to 2019, we test this hypothesis at National Parks in the United States. We find national parks experienced substantial growth in visitation after Instagram had gained influence as a social media app but the reasons for the increase vary across parks. A small number of National parks with significant viral content with high user engagement on Instagram saw increases in visitation attributable to the cumulative impact over time from this influential content whereas most parks with less viral content saw visitation increases associated with the volume of upload activity. Posts from avid users of Instagram have the potential to impact a broader set of parks through content with high engagement. We also use textual and sentiment analysis to show that engagement online is driven by expressing both positive and negative sentiment about the content or listing points of interest and by avid users of the app.

Restorative Energy Justice and Its Implications for Electric Utility Infrastructure and Ownership in Hawaiʻi

Richard Wallsgrove

(View Paper)

Abstract:
While distributive justice and procedural justice have received substantial attention from energy scholars, recent work identifies restorative justice as an underdeveloped component of the energy justice framework. As conceived in the context of criminal law, restorative justice seeks to more precisely account for harms and obligations that arise from wrongdoing, and to widen the circle of participation in repairing those harms. Restorative environmental justice wields these principles to advance the environmental justice framework beyond a tight focus on disparate environmental and health impacts. Restorative energy justice faces the challenge of deploying this restorative approach in an energy landscape that is often tightly focused on technology choices and business concerns.

In Hawai‘i, we find an opportunity to operationalize the concept of restorative energy justice. The origin of Hawai‘i’s regulated electricity industry is indelibly intertwined with the illegal overthrow of the Hawaiian Kingdom. By incorporating a restorative approach that more fully considers the implications of those roots, energy regulators can better account for the future costs and benefits associated with Hawai‘i’s effort to decarbonize its electricity system. In turn, this improved accounting can reduce the risk that the urgency of decarbonization will be placed in a false tension with the imperative of justice.

Energy-Fueled Growth and Collapse: The Economics of Energy Return on Investment

Derek Lemoine

Abstract:
Scholars have speculated about the role of new energy resources in the initial growth takeoff of the Industrial Revolution and also about whether a shift to renewable resources would hinder future growth. I study various types of energy resources within a conventional growth model. I show that technical change was necessary to avoid declining living standards in societies that relied on biomass resources. A switch to mined resources such as coal allowed living standards to be constant even in the absence of technical change, but technical change was still necessary for growth. A second switch to tapped resources such as oil or solar photovoltaics opens up more possibilities. In particular, if inputs to deposit tapping are essential, then energy-scarce degrowth occurs when energy is not sufficiently productive in making energy. But if inputs to deposit tapping are inessential, then can get growth even without technical change, as long as energy is sufficiently productive in making energy or new deposits are found sufficiently rapidly. I formally relate energy return on energy invested (EROI) metrics to each of these cases and consider whether there are thresholds to watch out for.

Modeling Decisions in Hawaii’s Deep-set Longline Fishery: Fishing under spatial closures and biomass change

Kristy Wallmo

Abstract:
Dr. Kristy Wallmo is a fisheries economist at the National Marine Fisheries Service and has been working for the last year at the Pacific Islands Fisheries Science Center on developing a spatial location model of fishing site selection, or site choice model, for the Hawaii deep-set longline fishery. This fishery predominantly targets adult bigeye tuna and is economically and culturally important to the state. Kristy will present a brief overview of the fishery and the preliminary results of the site choice model, with attention to the challenges of model development in a data rich but spatially extensive and high profile fishery. Preliminary results suggest that expected catch, sea surface temperature, cost, and potentially a social network among vessels, are all strong predictors of a vessel’s decision of where to fish. The utility of the model, e.g. predictions of welfare change, effort redistribution, disincentive penalty structures, will be illustrated by simulating two hypothetical yet plausible scenarios including (a) closure of the Southern Exclusion Zone (a zone closed to the deep-set longline fishery after two interactions between the fishery and false killer whales) and (b) changes to expected catch following climate-driven tuna biomass changes discussed in Bell et al. (2021). Kristy is very interested in receiving feedback on the model and specifically on the decisions made during model development.

Introduction to WEER & "The Link Between Extreme Heat and Crop Yields: Implications for water demand and food supply under climate change"

Michael Roberts

Abstract:
I will provide a brief introduction to this semester’s workshop and present slides from a presentation I gave to the Board on Agriculture and Natural Resources (BANR) of the National Academies of Sciences, Engineering, and Medicine this past Summer. The talk reviews the link between crop yield outcomes and extreme heat, what we’ve learned about the mechanisms underlying that link, and what it could mean for water availability and food security. A key takeaway: the effects of climate change on water demand could be as great as its effects on water supply.