How Do Long‐Shot Outcomes Affect Preferences for Climate‐Change Mitigation?

This article takes a fresh look at how public uncertainty influences willingness to pay (WTP) for climate‐change mitigation programs. I elicit subjective distribution functions over future global mean temperatures and WTP for mitigation. I find, not surprisingly, that subjects, on average, view climate change as a “bad,” and the higher the expected temperature increase they perceive, the more they are willing to pay for mitigation. Subjects are generally risk averse, so that they are WTP more for mitigation programs when the outcome of the program is more certain. The skew of the subjective climate‐change distribution also affects preferences, so that aversion to catastrophic outcomes is an important component of WTP for mitigation. I find that models that ignore skew are likely to underestimate the influence of uncertainty on willingness to pay for climate‐change mitigation.     

Heading for the Hills? Effects of Community Flood Management on Local Adaptation to Flood Risks

The Community Rating System (CRS) program was implemented by the U.S. Federal Emergency Management Agency (FEMA) in 1990 as an optional program to encourage communities to voluntarily engage in flood mitigation initiatives. This article uses national census tract‐level data from 1980 to 2010 to estimate whether CRS participation and flood risk affect a community's local patterns of population change. We employ an instrumental‐variables strategy to address the potential endogeneity of CRS participation, based on community‐scale demographic factors that predict when a tract's host community joins the CRS. The results find significant effects of the CRS program and flood risk on population change. Taken together, the findings point to greater propensity for community‐scale flood management in areas with more newcomers and programs such as CRS stabilizing population, though not especially in flood‐prone areas. We observe the CRS neither displacing population toward lower‐risk areas nor attracting more people to flood‐prone areas.     

Flood Risk and Salience: New Evidence from the Sunshine State

A growing literature finds evidence that flood risk salience varies over time, spiking directly following a flood and then falling off individuals' cognitive radar in the following years. In this article, we provide new evidence of salience exploiting a hurricane cluster impacting Florida that was preceded and followed by periods of unusual calm. Utilizing residential property sales across the state from 2002 through 2012, our main estimate finds a salience impact of ?8%, on average. The salience effect persists when we base estimation only on spatial variation in prices to limit confounding from other simultaneous changes due to shifting hedonic equilibria over time. These effects range from housing prices decreases of 5.4–12.3% depending on the year of sale. Understanding flood risk salience has important implications for flood insurance and disaster policy, the benefits transfer literature, and, more broadly, our understanding of natural disaster resilience. JEL Classification: Q51, Q54, R21     

Flood Insurance and Risk Reduction: Market Penetration,Coverage, and Mitigation in Coastal North Carolina

This article provides an overview of flood risk management in the United States, focusing on the National Flood Insurance Program and the Community Ratings System (CRS), which is designed to promote flood hazard mitigation. We review the empirical literature that examines market penetration and demand for flood insurance, as well as factors that influence community participation in CRS. Combining data from separate (but similar) surveys conducted in Dare County, North Carolina in 1998 and 2008, we examine trends in flood insurance holdings and explore the extensive (binary participation) and intensive (coverage level) margins using regression analysis. We explore trends in CRS mitigation activities in Dare County and discuss potential difficulties in analyzing these data. Finally, we highlight avenues for future research.     

TREATMENT EFFECTS OF CLIMATE CHANGE RISK ON MITIGATION AND ADAPTATION BEHAVIOUR IN AN EXPERIMENTAL SETTING*

This paper explores the collective action problem as it relates to climate change and develops two models that capture the mitigation–adaptation trade‐off. The first model presents climate change as a disaster that will occur with certainty, and where both mitigation and adaptation reduce the size of the loss associated with the disaster (the so‐called deterministic model). The second model presents climate change as an uncertain event, where mitigation affects the probability of disaster while adaptation again reduces the size of the loss (this is the so‐called stochastic model). Comparing the two models in a one‐shot public goods experiment with students, we find no significant differences in subjects' choice to mitigate. The experiments also reveal a relatively low rate of mitigation for both models compared with earlier studies.     

Measuring Heterogeneous Price Effects for Home Acquisition Programs in At‐Risk Regions

Any entity offering flood insurance, whether it is private or government‐administered such as the National Flood Insurance Program (NFIP), faces the challenge of solvency. This is especially true for the NFIP, where homeowner affordability criteria limit the opportunity to charge fully risk‐based premiums. One solution is to remove the highest flood risk properties from the insurer's book of business. Acquisition (buyout) of flood‐prone structures is a potentially permanent solution that eliminates the highest risk properties while providing homeowners with financial assistance to relocate in a less risky location. To encourage participation, homeowners are offered a preflood fair market value of their damaged (or at risk of damage) structures. Although many factors have been shown to affect a homeowner's decision to accept an acquisition offer, very little research has been devoted to the influence of price or monetary incentive offered on homeowners' willingness to participate in acquisition programs. We estimate a pooled probit model and employ a bootstrap methodology to determine the effects of hypothetical home price offers on homeowners' acquisition decisions. We do so while controlling for environmental factors, property characteristics, and homeowner sociodemographic characteristics. Results show that price indeed has a positive effect on likelihood of accepting an acquisition contract. Furthermore, estimated homeowner supply curves differ significantly based on the damage status of the acquisition offer, as well as homeowner and property characteristics.     

Capitalization of Flood Insurance and Risk Perceptions in Housing Prices: An Empirical Agent‐Based Model Approach

Federally regulated or insured lenders in the United States are mandated to require flood insurance on properties that are located in areas at high risk of flooding. Despite the existence of this mandatory flood insurance requirement, take‐up rates for flood insurance have been low, and the federal government's exposure to uninsured property losses from flooding remains substantial. Meanwhile, the value of capital at risk varies significantly with flood events and changing risk perceptions, which necessitates mechanisms that stabilize these dynamics. In this article we discuss how a scenario of complete insurance uptake, under various risk attitudes, affects the value of properties in the 100‐year and 500‐year flood zones. Our results indicate that an increase in flood insurance uptake may provide such a mechanism by lowering the value of capital at risk in the flood zone consistently, independent of homeowners' risk attitudes. We apply an empirical adaptive agent‐based model to examine the capitalization of insurance costs, risk premiums, and their interaction in housing prices. Our approach combines widely‐used empirical hedonic analysis with the computational economic framework. We highlight the usefulness of our method in capturing the marginal implicit price of homeowners' preferences that may change over time and separately assess the effect of various factors and policies on property values, illustrating the agent‐based modeling as a valuable complement to traditional hedonic analysis.     

Flood Fatalities in the United States: The Roles of Socioeconomic Factors and the National Flood Insurance Program

Flooding is the most frequent disaster type among all severe weather events in the United States. Over the 20‐year period from 1996 to 2015, a total of 107,743 floods resulted in 1563 fatalities and over $167 billion in damages. Climate models suggest that the risk of major flooding will increase in the coming years. In this article, we provide new analysis of the life‐saving role of the National Flood Insurance Program (NFIP) using county‐level data for the United States over the years 1996–2015. The integrated view of the physical, social, economic, and political elements of disaster vulnerability guides the empirical analysis. Our analysis indicates that people most affected by floods are those who have weaker economic and social bases; lower education levels and poor housing quality increase flood vulnerability. We also find that local government spending on public safety and welfare significantly reduces overall flood vulnerability. Importantly, our estimates present new evidence that ex ante floodplain management and mitigation efforts required for participation in the NFIP have played a vital role in reducing flood‐related fatalities.     

China's sovereign debt: A balance-sheet perspective

We analyze China's sovereign debt by constructing balance sheets for China's government and public sector. We find that China's government debt-to-GDP ratio is lower than that of most large developed economies. We also find the debt-to-asset ratio of China's government and public sector significantly lower than its own historical height (1998–2002). Local government debt is mainly to finance infrastructure investments. Local government debt risk is amplified by two mismatches. The first is the income-expenditure mismatch between central and local governments. The second is the maturity mismatch of short-term debt and long-term infrastructure investments. The maturity mismatch may cause short-term repayment difficulties.     

Japanese Nuclear Power and the Kyoto Agreement

A global computable general equilibrium model is used to evaluate interactions of nuclear power and climate change policy in Japan. We find that to match official Japanese forecasts for nuclear power would require subsidies of 50 to 70 percent. We find that the carbon price is $20 to $40 (US 1995$) per ton higher compared with the unconstrained case if nuclear expansion is limited to plants already commissioned or under construction, a scenario whose likelihood increased as a result of the recent nuclear accident. J. Japan. Int. Econ., September 2000, 14(3), pp. 169–188. Joint Program on the Science and Policy of Global Change, 77 Massachusetts Avenue, Building E40-263, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139-4307. Copyright 2000 Academic Press.Journal of Economic Literature Classification Numbers: Q4, Q2, F1.     

Promoting pro-poor growth through infrastructure investment: Evidence from the Targeted Poverty Alleviation program in China

This paper empirically estimates the effects of infrastructure investments on the level and distribution of impoverished households' income, utilizing the arguably exogenous investment shock from the Targeted Poverty Alleviation program in China. We focus on the agricultural income of poor rural households. We also examine whether these infrastructure investments increase or decrease income inequality within the impoverished group. We distinguish among different types of infrastructure investment, aiming to identify the investments effective in promoting growth in agricultural income, especially for the poorest. Based on a comprehensive household-level administrative dataset and econometric analysis, we find that electricity infrastructure significantly increases poor households' agricultural income and that the income benefit is equally distributed among the poor; agricultural irrigation infrastructure raises agricultural income significantly and delivers more benefit to the poorest households. An examination of the mechanism shows that both electricity and irrigation infrastructure increase the probability of participating in agricultural work and therefore increase agricultural income. These findings imply that, through increasing the utilization of agricultural land and the labor of impoverished households, electricity and irrigation infrastructure investments in rural impoverished areas are likely to lead to pro-poor and sustainable development.     

Scenario forecast of the development of the Northern Sea Route

The main exogenous (natural resources, climate, and world oil and gas markets) and endogenous (transport infrastructure, investments, and icebreaking and commercial fleets) factors are specified in the article as influencing freight traffic in areas of the Arctic waters. The scenarios of the development of freight flows of the Northern Sea Route in the short and strategic term are substantiated.     

各国参与国际气候合作影响因素的实证分析

通过构建一个各国减排意愿和行动的计量模型,作者分析了一国参与国际气候合作的影响因素,认为环境脆弱性变量对各国减排意愿和行动起的作用不是很显著,这表明这一变量目前还不是大多数国家参与国际气候合作的决定性因素。而减排成本是影响各国减排意愿和行动的决定性因素,减排成本越高,减排承诺和行动水平越低。虽然民主变量对各国减排承诺影响显著,但对实际减排行动影响并不是很显著,这表明发达国家在气候变化问题上存在"言行不一"现象,也表明"民主-环境"这一假说并不适用于气候变化问题。另外,一国排放是否越过峰值对一国参与国际气候合作有决定性影响,而一国低碳发展水平和低碳贸易比较优势对参与国际气候合作的影响并不显著。作者认为,目前影响各国参与国际气候合作的主要影响因素仍然是经济因素,减排成本对各国减排意愿和行动具有决定性意义。相比之下,环境脆弱性、国内民主制度都是次要影响因素。目前只有少数发达国家具备低碳经济和贸易比较优势,因此低碳比较优势还不是一个具有普遍性的解释变量。     

全球气候变化信息传播扩散模型及实证分析

引进从信息认知到观点认同的滞后因子,运用改进型的传染病扩散模型建立起全球气候变化信息传播模型,对中国、德国和意大利3个代表性国家的数据进行实证分析,探讨了公众环境意识水平在减缓气候变化行动中起到的作用,研究表明大多数国家都处于信息传播初期,需要进一步加强媒体传播。     

A Test of the Structure of PAC Contracts: An Analysis of House Gun Control Votes in the 1980s

We examine roll call votes on gun control in the U.S. House of Representatives during the 1980s to determine whether political action committees (PACs) make spot market purchases, prepay for votes in the prior election cycle, or make long-term investments. Previous tests generally employ PAC contributions from only one cycle, which could impose the wrong structure on contracts between PACs and politicians, causing researchers to misestimate a contribution's impact. We find that money from more than one election cycle influences roll call votes, which suggests that PAC expenditures are not simple spot market or one-period prepayment contracts. Most remarkably, we find that the National Rifle Association buys votes with contributions from three election cycles.     

Effect of promotion pressure and financial burden on investment in public–private partnership infrastructure projects in China

By identifying the political motives of officials and local governments, this study aims to provide a new political economic analysis framework for understanding China's incentives for investing in public–private partnership (PPP) infrastructure projects. Chinese urban panel data for the period 2013–17 were used to examine the mechanisms of promotion pressure and financial burden in relation to investments in PPP infrastructure projects. Based on our findings, the following policy recommendations are proposed: standardise the behaviour of local government officials in promoting PPP projects, establish a lifelong accountability mechanism for PPP project performance, establish a mechanism for local government debt risk assessment and prevention, and avoid the risk of local debt arising from over‐investment in PPP infrastructure projects. Moreover, a match should be formed between local economic infrastructure planning and investment plans to avoid over‐ or under‐investment.     

RESPONSES OF ECONOMIC SYSTEMS TO ENVIRONMENTAL CHANGE: PAST EXPERIENCES

Current discussions of climate change are overly focused on the science underpinning environmental impact, with little attention to socioeconomic consequences. The economics of environmental change in particular is insufficiently informed by the lessons that past experiences can yield. Drawing on case studies from Europe and Asia, this special issue underlines the importance of historical context, as well as markets, institutions, technology, and the role of international trade in understanding how economic systems have responded to environmental changes. Past economies have responded dynamically to environmental change rather than simply constrained deterministically by the climatic and ecological events that have engulfed them.     

森林碳汇市场改革的法律思考——以气候融资为视角

构建"气候智能"型世界的关键是增加发展中国家的减排资金,填补气候融资缺口需要对现有的碳汇市场进行改革并开拓新的资金来源。本文从考察森林碳汇的国际法律规定入手,分析气候融资需要对森林碳汇市场进行改革,最后以气候融资为视角思考如何进行森林碳汇市场改革,为进一步研究应对全球气候变化问题提供参考。     

我国碳减排的定量评估

作为全球第一大碳排放国和第二大经济体,我国正承受着越来越大的碳减排压力。在世界各国都参与应对气候变化的进程中,我国的最优碳减排幅度是怎样的呢？本文在Nordhaus的RICE-2010模型基础上,通过将化石能源的消耗内生于经济系统模块,改良出RICE-E模型。数值计算表明,从2005至2095年,我国需实现完全碳减排,相应的碳税水平从每吨碳排放68．7元（2010年价）提高到接近2000元。这个力度在世界各大国中并不是最激进的,位处俄罗斯和美国之后,与欧盟、拉美为同一档次,但强于日本和印度。在此碳减排进程下,我国碳排放量由升转降的时间拐点出现在2055年左右。