Policymakers and advocates alike often turn to benefit transfers to estimate the economic value of environmental amenities when primary valuation studies are infeasible.Coral reef ecosystems, among the most biologically diverse and productive ecosystems on the planet, are an amenity for which benefit transfers are particularly helpful. Meta analyses, which synthesize site and methodological characteristics from many different studies, can improve upon traditional site-to-site transfers. We build on previous research on meta analysis by introducing threshold effects. We find that a threshold in reef quality exists: users of coral reefs place a higher value on improvements in live coral cover on degraded reefs than on healthy ones. Relaxing the assumption of users' constant valuation across the distribution of this characteristic improves the performance of coral reef benefit transfers.Tests of convergent validity reveal that including the threshold effect reduces the variability and magnitude of transfer errors in some experiments. . We would like to thank Peter Edwards and Robert Johnston for useful comments and suggestions. We also gratefully acknowledge Robert Johnston for providing the metadata. The support of NOAAs Office of Science and Technology is gratefully acknowledged. The views and opinions expressed or implied in this article are those of the authors and do not necessarily reflect the position of the National Marine Fisheries Service, NOAA.
We study stabilization targets: common environmental policy recommen dations that specify a maximum probability of an environmental variable ex ceeding a fixed target (e.g. limit climate change to at most two degrees C above preindustrial). An emissions policy (e.g. greenhouse gas emissions abatement) affects the environmental variable. Previous work generally considers stabiliza tion targets under certainty equivalence. Using an integrated assessment model with uncertainty about the sensitivity of the temperature to greenhouse gas (GHG) concentrations (the climate sensitivity), learning, and random weather shocks, we calculate the optimal GHG emissions policy with and without sta bilization targets. We characterize the range of feasible targets and show that in general, climate change has far too much uncertainty and inertia to be controlled with the precision implied by stabilization targets. We calculate the welfare cost of stabilization targets. We find that the stabilization targets have three welfare costs. First, the targets are inflexible and do not adjust to new information about the climate system. Second, the target forces the emissions policy to overreact to transient shocks. Third, the commonly proposed target temperature is lower than the unconstrained optimum under certainty. Total welfare costs are on the order of 5%, of which one quarter is caused by inflexibility and overreaction, effects present only in a model with uncertainty.
This article presents the first panel‐data evidence of a human health externality from the air pollution generated by surface coal mining. In West Virginia, a standard deviation increase in a county's exposure to surface coal mining is associated with 9.85 more asthma hospitalizations per 100,000 residents in a given quarter. Interpreted causally, this suggests over $11 million in hospitalization costs over the 6‐year study period. The study builds on earlier cross‐sectional research by controlling for unobserved county‐level heterogeneity, and by defining more accurate measures of exposure. Both methods are shown to reduce the bias associated with earlier estimates of coal mining's effect on health. Young and elderly women demonstrate the largest sensitivities to surface mining. Falsification tests reveal that neither hernias nor bone fractures demonstrate any relationship with surface mining activity.
In hedonic studies of how environmental disamenities influence house prices, the homes that are treated are typically unknown. We propose a new method for defining treatment buffers and apply our technique to disamenities that have thus far received little attention: surface coal mines. Our leave-one-out cross-validation approach identifies an optimal buffer of 2,300 m in two Appalachian counties at which effects dissipate. Hedonic regressions indicate that treated homes sell for 15.5% less than untreated homes. We supplement these results with nearest-neighbor covariate matching models and recover average treatment effects on the treated of 14.7% price reductions. (JEL Q32, C21
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