The cost-effectiveness of auction mechanisms is challenged when complementarities exist between bids. Such complementarities frequently exist in the context of conservation, and they can be magnified when conservation is targeted in particular locations on the landscape (e.g., in the context of migratory corridors or storm-peak mitigation). We use a laboratory experiment to test several hypotheses about how access to benefit information and bidder communication (which can facilitate both bidder coordination and rent-seeking), affect bidder behavior and auction performance in a spatial procurement auction that targets conservation coalitions with specific configurations. We find that access to benefit information improves auction performance in a single large targeted coalition. The effects of benefit information are less clear when multiple, smaller coalitions are targeted. Bidder communication leads to decreased auction performance with inexperienced bidders in a single large targeted coalition, although experienced bidders are able to improve auction performance via communication across landscape configurations. These results emphasize that the benefits of bidder coordination in the spatial conservation context can justify auction design choices that promote such coordination, even while simultaneously reducing the competitiveness of bidding.

Several observational studies from locations around the globe have documented a positive correlation between air pollution and the severity of COVID-19 disease. Observational studies cannot identify the causal link between air quality and the severity of COVID-19 outcomes, and these studies face three key identification challenges: 1) air pollution is not randomly distributed across geographies; 2) air-quality monitoring networks are sparse spatially; and 3) defensive behaviors to mediate exposure to air pollution and COVID-19 are not equally available to all, leading to large measurement error bias when using rate-based COVID-19 outcome measures (e.g., incidence rate or mortality rate). Using a quasi-experimental design, we explore whether traffic-related air pollutants cause people with COVID-19 to suffer more extreme health outcomes in New York City (NYC). When we address the previously overlooked challenges to identification, we do not detect causal impacts of increased chronic concentrations of traffic-related air pollutants on COVID-19 death or hospitalization counts in NYC census tracts.

Effectively supporting seasonal migratory species requires spatial and temporal coordination of mechanisms to induce conservation, often across many public and private actors. We develop a framework to evaluate the efficacy of such mechanisms based on two salient ecological characteristics of migratory species: route plasticity and resilience. We describe how combinations of these characteristics heighten the relevance of four challenges facing spatial–temporal coordination of migratory species support: free riding, holdouts, transaction costs, and transnational coordination. After detailing how the available mechanisms might best meet migratory species' needs and mitigate coordination challenges across resilience and route plasticity space, we use the framework to identify combinations of mechanisms that can support the needs of two migratory species: mule deer and monarchs.

Ecosystems generate a wide range of benefits for humans, including some market goods as well as other benefits that are not directly reflected in market activity 1 . Climate change will alter the distribution of ecosystems around the world and change the flow of these benefits 2 , 3 . However, the specific implications of ecosystem changes for human welfare remain unclear, as they depend on the nature of these changes, the value of the affected benefits and the extent to which communities rely on natural systems for their well-being 4 . Here we estimate country-level changes in economic production and the value of non-market ecosystem benefits resulting from climate-change-induced shifts in terrestrial vegetation cover, as projected by dynamic global vegetation models (DGVMs) driven by general circulation climate models. Our results show that the annual population-weighted mean global flow of non-market ecosystem benefits valued in the wealth accounts of the World Bank will be reduced by 9.2% in 2100 under the Shared Socioeconomic Pathway SSP2-6.0 with respect to the baseline no climate change scenario and that the global population-weighted average change in gross domestic product (GDP) by 2100 is −1.3% of the baseline GDP. Because lower-income countries are more reliant on natural capital, these GDP effects are regressive. Approximately 90% of these damages are borne by the poorest 50% of countries and regions, whereas the wealthiest 10% experience only 2% of these losses.

Climate change poses a growing threat to biodiversity, but the welfare consequences of these changes are not well understood. Here we analyze data on the US Endangered Species Act and project increases in species listing and spending due to climate change. We show that higher endangerment is strongly associated with the probability of listing but also find a large bias toward vertebrate species for both listing and spending. Unmitigated warming would cause the listing of an additional 690 species and committed spending of $21 billion by 2100. Several thousand more species would be critically imperiled by climate change but remain unlisted. Finally, we compare ESA spending with estimates of willingness to pay for conservation of 36 listed species. Aggregate WTP is larger than ESA spending for the vast majority of species even using conservative assumptions and typically one to two orders of magnitude larger than direct ESA spending using less restrictive assumptions.

The threats posed by COVID-19 have catalyzed a search by researchers across multiple disciplines for policy-relevant findings about critical risk factors. We contribute to this effort by providing causal estimates of the link between increased chronic ambient pollutant concentrations and the intensity of COVID-19 disease, as measured by deaths and hospitalizations in New York City from March through August, 2020. Given concerns about unobservable characteristics that contribute to both ambient air pollutant concentrations and the impacts of COVID-19 disease, we instrument for pollutant concentrations using the time spent downwind of nearby highways and estimate key causal relationships using two-stage least squares models. The causal links between increases in concentrations of our traffic-related air pollutants (PM2.5, NO2, and NO) and COVID-19 deaths are much larger than the correlations presented in recent observational studies. We find that a 0.16 g/m3 increase in average ambient PM2.5 concentration leads to an approximate 30% increase in COVID-19 deaths. This is the change in concentration associated with being downwind of a nearby highway. We see that this effect is mostly driven by residents with at least 75 years of age. In addition to emphasizing the importance of searching for causal relationships, our analysis highlights the value of increasing the density of pollution-monitoring networks and suggests potential benefits of further tightening of Clean Air Act amendments, as our estimated effects occur at concentrations well below thresholds set by the National Ambient Air Quality Standards.

AbstractWe use detailed location data to show that contacts between individuals in most U.S. cities and counties are fat tailed, suggesting that the fat tails documented in a small number of superspreading clusters are widespread. We integrate these results into a stochastic compartmental model to show that COVID-19 cases were also fat tailed for many U.S. cities for several weeks in the spring and summer. Due to epidemiological thresholds, fat-tailed cases would have been more prevalent if not for the gradual increase in contact rates throughout the summer that made outbreaks more certain.

We survey the growing literature on fat-tailed distributions in environmental economics. We then examine the theoretical and statistical properties of such distributions, focusing especially on when these properties are likely to arise in environmental problems. We find that a number of variables are fat tailed in environmental economics, including the climate sensitivity, natural disaster impacts, spread of infectious diseases, and stated willingness to pay. We argue that different fat-tailed distributions arise from common pathways. Finally, we review the literature on the policy implications of fat-tailed distributions and controversies over their interpretation. We conclude that the literature has made great strides in demonstrating when fat tails matter for optimal environmental policy. Yet, much is less well understood, including how alternative policies affect fat-tailed distributions, the optimal policy in a computational economy with many fat-tailed problems, and how to account for imprecision in empirical tests for fat tails.

Payment-for-ecosystem services programs may use auctions to procure ecosystem services for cost-effective conservation. Conservation practices that generate private benefits (e.g., on-site benefits of erosion prevention) can reduce the effective cost of participation for landowners, and the inclusion of these services in the auction scoring criteria could increase overall cost-effectiveness for the buyer. However, the potential cost-effectiveness gain of including these private-benefit conservation practices may not be fully realized, as increased heterogeneity in the net cost of participation may reduce competition. Our induced-value laboratory experiment explores the impact of heterogeneous private benefits of conservation on auction cost-effectiveness when conservation practice choice is endogenous to offer formation. Heterogeneity in the private benefits of conservation across the landscape generates variation in competition levels across bidders that can lead to increased rent-seeking by bidders with substantial private benefits.

Background: Modern pollution – pollution attributable to industrialization and urbanization – is responsible for nearly 6 million deaths per year, more than all the deaths from HIV, malaria, and tuberculosis combined; yet it receives comparatively little attention in the international development agenda [1]. Objective/Methods: This study attempts to highlight the funding disparity between select key threats to global health by quantifying the levels of international official development aid (ODA) allocated to reducing pollution’s negative impact on human health using a new metric – dollars spent per death caused by health threat. Findings: Using only reported ODA spending for 2016, we calculate an average investment of $14/death for modern pollution, compared with $1,250/death for malaria, $190/death for tuberculosis, and $165/death for HIV/AIDS. Conclusions: Although there are substantive limitations to this analysis, results are sufficient to galvanize action to better monitor and track investments in modern pollution reduction. Donor countries have failed to respond to this urgent public health crisis. Given the severity of its public health burden, there is a critical need for funding to be allocated specifically to pollution reduction.

A unique GIS data set from Indonesia that distinguishes smallholder and plantation operations is used to test the impact of district subdivision, which enhances local control of natural-resource revenues, on the location of smallholder forest conversion. Nonparametric analyses show that in subdivided districts, smallholders convert forests on steeper land that is farther from the nearest road and deeper into the forest. Smallholders are also less responsive to forest protection in subdivided districts. District subdivision imposes external costs of $1,629 to $4,941 per hectare due to increased carbon emissions associated with smallholder conversion deeper into the forest. (JEL C14, Q15)

Existing research emphasizes the sensitivity of conservation auction performance and bidder behavior to auction design choices, as these auctions are not incentive compatible, meaning rent seeking must be controlled. Procuring agencies must decide how to provide bidders with information about the environmental quality of different conservation practices to manage the trade-off between an increased probability of selecting the optimal practice and increased rent-seeking behavior associated with this information. We use an induced-value laboratory experiment to explore how access to quality information and variation in the bid-submission protocol can best be combined to improve auction performance. We find that the auction performs best when a bid-menu format, in which participants submit bids for all their practices, is combined with information about the environmental quality rank of available conservation practices.

We perform two tests that estimate the mass of the upper tail of the distribution of aggregate US tropical cyclone damages. Both tests reject the hypothesis that the distribution of damages is thin tailed at the 95% confidence level, even after correcting for inflation and growth in population and per capita income. Our point estimates of the shape parameter of the damage distribution indicate that the distribution has finite mean, but infinite variance. In the second part of the paper, we develop a microfoundations model of insurance and storm size that generates a fat tail in aggregate tropical cyclone damages. The distribution of the number of properties within a random geographical area that lies in the path of a tropical cyclone is shown to drive fat tailed storm damages, and we confirm that the distribution of coastal city population is fat tailed in the US. We show empirically and theoretically that other random variation, such as the distribution of storm strength and the distribution of damages across individual properties, does not generate a fat tail. We consider policy options such as climate change abatement, policies which encourage adaptation, reducing subsidies for coastal development, and disaster relief policies, which distort insurance markets. Such policies can reduce the thickness of the tail, but do not affect the shape parameter or the existence of the fat tail. (C) 2017 Elsevier Inc. All rights reserved.

Conservation procurement auctions are implemented under conditions that deviate from those assumed to derive predictions of bidder behavior. Existing research has emphasized the sensitivity of auction performance and bidder behavior to auction design choices. In the conservation context, procuring agencies must decide how to provide bidders with information about the environmental quality of different conservation practices to manage the trade-off between an increased probability of selecting the optimal practice and increased rent-seeking behavior associated with this information. We utilize an induced-value laboratory experiment to explore how access to quality information and variation in the bid-submission protocol can best be combined to improve auction performance. We nd that the auction performs best when a bid-menu format, in which subjects submit bids for all their practices, is combined with information about the environmental quality rank of available conservation practices.

AbstractProcuring agencies in conservation auctions typically have more information about the ecosystem service (ES) quality of conservation actions than landowners and can affect auction outcomes by controlling participants’ access to this information. Our induced‐value laboratory auction experiment explores the impact of sellers’ access to ES‐quality information on auction efficiency when the conservation action choice is endogenous to offer formation. We find that providing ES‐quality information allows sellers to identify and submit higher‐quality conservation actions, an effect that counteracts previously identified efficiency losses from information rents.

Public agencies worldwide are increasingly adopting an ecosystem service framework to manage lands serving multiple uses. Yet, reliable, practical, and well-tailored methods remain a major limitation in moving from conceptual to actionable approaches. Together with one of the largest federal land managing agencies, we co-develop and co-demonstrate an ecosystem services approach tailored to specific decisions, through a process with potentially widespread relevance. With the U.S. Department of Defense (DoD), we focus on balancing military training with biodiversity and resource conservation under both budgetary and land-use pressures at a representative installation. In an iterative process of co-design and application, we define, map, and quantify multiple ecosystem services under realistic management options. Resource management budget emerges as a major determinant of the degree to which managers can sustain both necessary training environments – a DoD-specific ecosystem service – and a prairie ecosystem with species of conservation concern. We also found clear tradeoffs between training intensity and forest-related services. Our co-developed approach brings otherwise hidden values and tradeoffs to the fore in a balanced way that can help public agencies safeguard priority services under potentially conflicting uses and budget limitations.

Green electricity programs enable households to voluntarily contribute to the development of renewable electricity by purchasing green electricity through their local utility. Using a dataset of all utilities in the United States, this paper explores the utility, consumer, and program characteristics that influence participation levels in green electricity, as well as whether a utility chooses to offer a program. Among other results, we find that the key determinants of program participation are the education of the consumer base and the affordability of the green electricity program. Our results enhance understanding of private provision of environmental public goods and could aid in ex ante evaluations of whether a green electricity program is likely to cover its administrative costs or be a cost-effective way of improving environmental quality.

In Indonesia, forests are converted to agro-forestry systems by plantation operators and smallholders. Smallholder tenure is insecure and smallholders must choose where to locate production to balance the private returns conditional on maintaining control of the land against the probability of losing their land to plantations. A unique GIS data set is used to test predictions from a simple model regarding the impact of potential plantation conversion on the location of smallholder forest conversion between 2000 and 2008. Plantation threat is identified as high if the district boundary was rezoned following Suharto’s resignation, with rezoning representing an effort to increase the royalties generated from natural resource exploitation, including agroforestry. A global nonparametric specification test rejects the assumptions of parametric models that are commonly implemented in the context of forest conversion studies (e.g., logit, multinomial logit). A simulation study demonstrates that the nonparametric approach is robust to spatial autocorrelation as well. Smallholder production is more likely on low-slope parcels near the forest edge and the closest road when plantation threat is low, while smallholder production is unaffected by slope and distance to the nearest road, with a minor negative effect of forest edge distance with a higher threat of plantation conversion. There is evidence that smallholders seek refuge from the threat of plantation conversion by converting forests in protected areas when plantation threat is high. The conversion of remote, lower-return forests due to insecure tenure, illustrates the welfare losses of the system of informal smallholder property rights currently in place in Indonesia. JEL : C31, D23, Q15