Conference Agenda

Agri-environmental governance is a formidable challenge in many developing countries, with non-point source pollution from agricultural production being a particular concern. The efficacy of government interventions vary greatly, and the existing evidence is mixed. Command-and-control policies might be ineffective due to weak monitoring or poor implementation, while the market-based instruments can be effective but costly in the long run. In this paper, we take straw burning control in Heilongjiang province, China as a specific case to examine the evolution of its agri-environmental governance and the effect of stringent regulation & monitoring and subsidization on farmer’s straw-burning behavior. We collected satellite data on straw-burning spots and meteorological data for counties in Heilongjiang (as a treatment group) and its neighboring prefectures (as a comparison group) for the period 2013–2020, and employed difference-in-difference and spatial regression discontinuity methods to examine the effects were to conduct the empirical analyses. Our findings indicate that stringent regulations can be effective in reducing the number of straw-burnings in the field, while subsidization seems to yield an insignificant supplemental effect under strict monitoring conditions. Exploiting a natural experiment caused by COVID-19 related restrictions, we show that when stringent monitoring of regulations could not be effectively implemented to control the straw-burning, the market-based instruments such as subsidies were effective in curbing the rebound of straw burning behavior in the field.

What is the impact of cycling infrastructure on air quality in cities? This paper leverages the staggered rollout of New York City's bike share program to estimate the effect of cycling infrastructure on air pollution concentrations. I combine the universe of bike share trips with ground-level, high-resolution observational air pollution measures between 2010 and 2019. Through a routing algorithm, I use the location of bike share stations to map areas where road traffic is expected to decrease after the introduction of bike share. I compare these areas with others where traffic was likely unaffected using a staggered difference-in-differences strategy to retrieve causal estimates. I find that the deployment of bike share is associated with a 3% reduction in black carbon and 13% reduction in nitric oxide concentrations, both pollutants associated with road traffic. Back-of-the-envelope valuation of the health and mortality benefits associated with the reduction in nitric oxide concentrations suggests that bike share prevented up to $327 million in total social damages, or $3 per bike-share trip. In addition, I investigate potential mechanisms and show that the introduction of bike share is associated with a decrease in short taxi trips in areas served by bike share, which I interpret as suggestive evidence that bike share substitutes road traffic.

Mitigating greenhouse gas emissions and reducing air pollution represent two pressing and interwoven environmental challenges. While international carbon markets, such as the European Union Emissions Trading System (EU ETS), have demonstrated their effectiveness in curbing carbon emissions (CO2), their indirect impact on hazardous co-pollutants remains an understudied facet of environmental policy. This study provides novel quasi-experimental evidence on the impacts of the EU ETS on key toxic air pollutants—sulfur dioxide (SO2), fine particulate matter (PM2.5), and nitrogen oxides (NOx)—across regulated sectors. Leveraging the generalized synthetic control method, we generate plausible counterfactual pathways for how emissions of air pollutants would have evolved in the absence of the EU ETS. Our results suggest that the EU carbon market led to average emission reductions of around 39% for SO2, 28% for PM2.5, and 14% for NOx across regulated sectors between 2005 and 2021. Using official cost estimates, total pollution reductions translate on average into health co-benefits in the order of hundreds of billions of Euros. These findings underscore the pivotal role of accounting for public health co-benefits in the assessment of carbon abatement policies.

This paper documents the first-order welfare effects of firm heterogeneity under a homogeneous emission tax regime. Local and firm-level variations in market power, abatement costs, and abatement benefits can create a gap between optimal and realized emission reduction. We examine this question in the context of China’s highly concentrated cement industry, which was subjected to multiple emission tax changes across time and location between 2011 and 2018. Using a comprehensive firm-level data set that allows us to estimate firm-level responses to regulation, we find substantial heterogeneity in the compliance behavior of firms --- through adjustments in output levels, price, and emission intensity. We then use the structurally estimated firm-level marginal abatement costs to quantify the deviation of local marginal pollution abatement costs from its marginal benefits. The model shows that the gap between observed abatement and production firm responses and the socially optimal responses is explained by two factors: the firm’s market power and the correlation between local abatement costs and benefits. By using variation in market power generated by two data-driven approaches and local abatement costs and benefits, we can empirically assess the importance of each of these two drivers of the sub-optimal response to emission taxes. A counterfactual analysis shows that output-based rebates coupled with a homogeneous emission tax can help mitigate the distortion from market power and generate a 4.72 billion RMB (0.67 billion dollars) welfare increase.