Research

Distributional Impacts of Carbon Capture Technology

(with Daniel Shawhan, Christoph Funke, Maya Domeshek, Sally Robson, Steven Witkin, Dallas Burtraw, and Burçin Ünel)

This project was part of the NBER workshop on Distributional Consequences of New Energy Technologies, held in June 2022 and supported by the Alfred P. Sloan Foundation

While carbon capture, utilization, and storage (CCUS) technology is seen by some as crucial for cost-effective energy decarbonization, it faces opposition based on air pollution and equity concerns. To understand this cost-air pollution tradeoff, we simulate the potential impacts of CCUS deployment in the U.S. power sector under plausible climate policies. We show the existence of this tradeoff critically depends on the underlying policy, which affects the type of generation CCUS could displace. When we disaggregate our results, we find that the air pollution effects of CCUS, positive or negative, are largest for Black and low-income populations. We show CCUS can yield substantial energy cost savings, particularly benefiting Black, Hispanic, and lower-income communities even when increasing air pollution. Our sensitivity analyses highlight the effects of uncertainties about the technology and its emissions rates on costs and benefits. Overall, this paper contributes to our understanding of broader distributional consequences of CCUS.

Out in the Cold: Effect of Temperature Shocks on Evictions

Almost one million households are evicted annually in the United States. The consequences of eviction can be dire, including reduced future earnings and access to credit. Understanding the drivers of eviction has thus become a pressing policy question. I use data on the near-universe of court-ordered evictions in the United States to expose an environmental cause of evictions. Specifically, I show that cold winter shocks increase eviction rates—particularly in counties that are poorer and have lower rates of White population—and hence contribute to encroachment of poverty. I present evidence consistent with two mechanisms driving this effect. The first is energy prices: higher heating fuel prices aggravate the effect of cold temperatures on evictions. The second is a labor channel: effects are driven by counties with larger employment shares in more weather-exposed industries, such as construction and agriculture, particularly if wages in these industries experience negative growth shocks. Overall, this paper increases our understanding of how environmental shocks can exacerbate economic inequality.

Surge of Inequality: How Different Neighborhoods React to Flooding 

Recovery scenarios after flooding vary by locality, from permanent declines in economic activity to capital gains. This paper shows that divergent post-flood changes at the neighborhood level increased pre-existing spatial polarization along property value, racial, and income lines. Using evidence from property sales in four US states affected by Superstorm Sandy in 2012, combined with buyers' demographics, I find that flooded properties in neighborhoods with high preexisting income had more high-income white buyers and higher sale prices than comparable non-flooded coastal properties, seemingly capitalizing on the flood and offsetting average drops. Using machine learning algorithms, I corroborate that of a rich set of preexisting place characteristics,  neighborhood income best discriminates between most positively and most negatively affected properties. This evidence is consistent with a model of neighborhood segregation in which residential sorting—induced by credit-constrained households deriving higher disutility from flooding—rationally results in more high-income residents and higher property prices in initially higher-income neighborhoods. As coastal flooding is forecasted to increase, these results improve our understanding of the heterogeneous impacts of floods, and on the existence of adaptive behavior, or lack thereof, after flooding.

Climate affects socioeconomic outcomes over large spatial scales: surface water availability and infant mortality in the Niger Inland Delta in Mali

(with Anna Tompsett)

The vast majority of climate impact studies focus on the relationships between local climate variables—such as temperature, precipitation, or hurricanes—and local outcomes. But climate change impact projections may systematically underestimate total impacts if they do not account for the ways in which local outcomes depend on more distant climate events, for example through upstream rainfall in major river basins. In the Niger Inland Delta, in Mali, agriculture depends almost entirely on the availability of surface water through an annual flood following the rain season in the Guinean highlands, located hundreds of kilometers away. We construct a temporal series of flood extent using remotely sensed imagery, combined with household survey data on the timing and location of births and infant deaths across Mali. Exploiting quasi-random spatial and temporal variation in annual surface water availability, we find that larger extents of local surface water at the time of birth lower the probability of children dying before they turn one. Our results highlight the importance of accounting for the impacts of a changing climate that take place over large spatial scales.

Flood resilience in slums: community-responsive adaptation in Kibera, Nairobi  

(with Juma Benard, Vera Bukachi, Joe Mulligan, Luke Olang, and Anna Tompsett)

A large and growing number of the world's population live in slums, where the twin trajectories of rapid urbanization and increased flooding driven by climate change collide. However, there is much we do not know about how flooding affects the lives of residents in informal settlements because high quality survey data from these contexts remains rare.  Do rents price in flood risk?  How well-informed are households about flood risk?  Does flood risk disproportionately affect new arrivals who may be less well-informed about risk?  What is the extent and what are the consequences of flood-induced displacement?  In this study, we make progress on answering these questions by tracking 1500 slum residences  through repeated surveys for up to four years and, exploiting variation in flood exposure, estimating the causal impact of flooding on health, property, rents, and displacement.

Inland Flooding: Estimating Damages and Protection from Insurance

(with Tim Foreman and Jason Wong)

With forecasted increases in heavy precipitation and associated flooding, there is a need to understand the economic impacts of flood events. Even if there is extensive research on the impacts of coastal floods, we cannot directly extrapolate these findings to inland flooding given different amenities and types of residents.  To date, analysis of the economic impacts of inland flooding at large temporal and spatial scales has been limited by the scarcity of flood damage metrics uncorrelated to socioeconomic characteristics of affected places. We combine data from flood duration, extension, and depth derived from NOAA's National Water Model with the near-universe of flood insurance claims and policies, data on mortgage applications, and residents' socioeconomic characteristics to derive three main initial findings of the economic impacts of inland flooding. First, flood duration is a relevant predictor of flood damage. Characterizing floods based purely on spatial characteristics (depth, extension) will likely paint an incomplete picture of inland flooding damage. Second, inland flood events have a sizable effect on housing markets, notably, census tracts that experience flooding see a decrease in house prices and a decrease in loan-to-income ratios in both mortgage applications and origination. Third, conditional on flood characteristics and number of existing policies, census tracts with higher shares of Black populations have a lower number of flood insurance claims. Unequal protection from insurance can exacerbate post-flood inequality. Our findings highlight the economic relevance of flooding impacts away from coastal areas.

policy reports and other work

Changes to household income in a Kenyan informal settlement during COVID-19

(with Anna Tompsett, Aaron Baum, Vera Bukachi, Pascal Kipkemboi, Allan Ouko K'oyoo and Joe Mulligan)

Link to working paper

More than a billion people live in densely-populated informal settlements worldwide. Crowded living conditions and limited resources may render these populations vulnerable to the health and economic effects of the COVID-19 pandemic. Representative and longitudinal survey data are needed to accurately measure impacts in these populations, but such data are scarce. Using satellite data and spatial sampling to ensure representativeness, we use longitudinal survey data on 1,033 households comprising 3,681 individuals collected pre- and post-pandemic to measure the economic effects of the COVID-19 pandemic households in six areas of the informal settlement of Kibera, Nairobi. The economic impacts are sizable and long-lasting. Household incomes declined at the start of the pandemic by 59% (95% CI: 50% to 69%) and remained 21% (95% CI: 13% to 28%) below the baseline level after six months. Respondents primarily attributed these declines in income to fewer labor market opportunities or lower demand for services, rather than the direct health impacts of the pandemic. The findings raise serious concerns about the welfare consequences of the COVID-19 pandemic for residents of informal settlements.

Making Regulations Fair: How Cost-Benefit Analysis Can Promote Equity and Advance Environmental Justice

(with Jack Lienke, Iliana Paul, Max Sarinsky, and Burçin Ünel)

Link to report

To achieve ambitious environmental justice goals such as those set by the Biden administration, agencies will need a toolkit for assessing and weighing the distributional effects of policy options. Focusing on environmental justice, this report outlines procedures and methodologies that the Office of Management and Budget (OMB) could apply to account for equity in the regulatory review process. The report recommends that OMB: instruct agencies to conduct more granular analysis of impacts; provide guidance on how to conduct such assessments; direct agencies on how to incorporate the results of such analysis into decisionmaking; and facilitate a whole-of-government pursuit of equity to transcend individual agencies' narrow mandates and cumulatively assess the distributional effects of policies enacted by many agencies.

Carbon Trading for New York City’s Building Sector: Report of the Local Law 97 Carbon Trading Study Group to the New York City Mayor’s Office of Climate & Sustainability

Contributing author

Link to report