The costs of "costless" climate mitigation.

The IPCC and leading economic models have different ideas about emissions reduction costs.

Why marginal CO2 emissions are not decreasing for US electricity: Estimates and implications for climate policy.

Marginal emissions of CO2 from the electricity sector are critical for evaluating climate policies that rely on shifts in electricity demand or supply. This paper provides estimates of marginal CO2 emissions from US electricity generation using the most recently available and comprehensive data. The estimates vary by region, hour of the day, and year to year over the last decade. We identify an important and somewhat counterintuitive finding: While average emissions have decreased substantially over the last decade (28% nationally), marginal emissions have increased (7% nationally). We show that underlying these trends is primarily a shift toward greater reliance on coal to satisfy marginal electricity use. We apply our estimates to an analysis of the Biden administration's target of having electric vehicles (EVs) make up 50% of new vehicle purchases by 2030. We find that, without significant and concurrent changes to the electricity sector, the increase in electricity emissions is likely to offset more than half of the emission reductions from having fewer gasoline-powered vehicles on the road. Moreover, using average rather than marginal emissions to predict the impacts significantly overestimates the emission benefits. Overall, we find that the promise of EVs for reducing emissions depends, to a large degree, on complementary policies that decarbonize both average and marginal emissions in the electricity sector.

The producer benefits of implicit fossil fuel subsidies in the United States.

This paper estimates the financial benefits accruing to fossil fuel producers (i.e., the producer incidence) that arise because of implicit fossil fuel subsidies in the United States. The analysis takes account of coal, natural gas, gasoline, and diesel, along with the implicit subsidies due to externalized environmental damages, public health effects, and transportation-related costs. The direct benefit to fossil fuel producers across all four fuels is estimated at $62 billion per year, a sum calculated due to the higher price that suppliers receive because of inefficient pricing compared to the counterfactual scenario where environmental and public health externalities are internalized. A significant portion of these benefits accrue to relatively few companies, and specific estimates are provided for companies with the largest production. The financial benefit because of unpriced costs borne by society is comparable to 18% of net income from continuing domestic operations for the median natural gas and oil producer in 2017-2018, and it exceeds net income for the majority of coal producers. The results clarify what the domestic fossil fuel industry has at stake financially when it comes to policies that seek to address climate change, adverse health effects from local pollution, and inefficient transportation.

On the use of group performance and rights for environmental protection and resource management.

Environmental and natural resource (ENR) policies that focus on group outcomes are common but have received relatively less attention from economists than policies based on individual behavior. Existing research tends to focus on particular contexts, such as water or air quality, fisheries, or land use. This paper discusses unifying themes of group performance policies, along with their advantages and disadvantages. We discuss a range of specific policy instruments, including group-based taxes, subsidies, and fixed penalties. We show how, in principle, group-based policies can be designed to achieve efficient provision of group-level environmental performance; however, in some cases, group policies can lead to suboptimal outcomes. We discuss the incentives for collaboration that can arise when regulators impose group performance policies, and the role that it can play in promoting efficient outcomes. We argue that the success of group-based policies will depend both on how the policy is designed (i.e., the external rewards and penalties) and on how the group operates. This implies potential complementarities between "top-down" regulatory interventions based on group performance and "bottom-up" within-group incentives for self-governance. Our discussion suggests that group performance policies should play a more prominent role in the suite of policy instruments considered by scholars and policymakers concerned with ENR management.

Pharmaceuticals in wastewater: behavior, preferences, and willingness to pay for a disposal program.

The presence of pharmaceutical compounds in treated wastewater and in surface waters is a growing environmental concern. This paper provides information about general awareness of the issue, disposal practices, willingness to pay for a disposal program, and willingness to participate in a disposal program. The results are based on a telephone survey of 1005 residents in southern California. Less than half of the respondents are aware of the issue. While disposal of unused medications through the trash and toilet/sink is the most common practices, respondents that are aware of the issue are more likely to return pharmaceuticals to a pharmacy or drop them off at a hazardous waste center. The results of a contingent valuation question indicate a substantial willingness to pay a surcharge on prescriptions to support the establishment of a pharmaceutical disposal program. The more conservative estimate of mean willingness to pay is $1.53 per prescription, which translates into an average annual willingness to pay of approximately $14. A benefit-cost comparison suggests ample scope for establishing a pharmaceutical disposal program that would yield positive net social benefits, even if the surcharge was applied to only one prescription per year. We also find that respondents are likely to participate in a disposal program. Assuming that the program is based on drop-off locations at local pharmacies, approximately 70 percent of the respondents would be very likely to return their unwanted or expired medicines.