Valuing ecosystem services from wetlands restoration in the Mississippi Alluvial Valley

This study assesses the value of restoring forested wetlands via the U.S. government's Wetlands Reserve Program (WRP) in the Mississippi Alluvial Valley by quantifying and monetizing ecosystem services. The three focal services are greenhouse gas (GHG) mitigation, nitrogen mitigation, and waterfowl recreation. Site- and region-level measurements of these ecosystem services are combined with process models to quantify their production on agricultural land, which serves as the baseline, and on restored wetlands. We adjust and transform these measures into per-hectare, valuation-ready units and monetize them with prices from emerging ecosystem markets and the environmental economics literature. By valuing three of the many ecosystem services produced, we generate lower bound estimates for the total ecosystem value of the wetlands restoration. Social welfare value is found to be between $1435 and $1486/ha/year, with GHG mitigation valued in the range of $171 to $222, nitrogen mitigation at $1248, and waterfowl recreation at $16. Limited to existing markets, the estimate for annual market value is merely $70/ha, but when fully accounting for potential markets, this estimate rises to $1035/ha. The estimated social value surpasses the public expenditure or social cost of wetlands restoration in only 1 year, indicating that the return on public investment is very attractive for the WRP. Moreover, the potential market value is substantially greater than landowner opportunity costs, showing that payments to private landowners to restore wetlands could also be profitable for individual landowners. © 2009 Elsevier B.V.

Environmental and technology policies for climate mitigation

We assess different policies for reducing carbon dioxide emissions and promoting innovation and diffusion of renewable energy. We evaluate the relative performance of policies according to incentives provided for emissions reduction, efficiency, and other outcomes. We also assess how the nature of technological progress through learning and research and development (R&D), and the degree of knowledge spillovers, affects the desirability of different policies. Due to knowledge spillovers, optimal policy involves a portfolio of different instruments targeted at emissions, learning, and R&D. Although the relative cost of individual policies in achieving reductions depends on parameter values and the emissions target, in a numerical application to the U.S. electricity sector, the ranking is roughly as follows: (1) emissions price, (2) emissions performance standard, (3) fossil power tax, (4) renewables share requirement, (5) renewables subsidy, and (6) R&D subsidy. Nonetheless, an optimal portfolio of policies achieves emissions reductions at a significantly lower cost than any single policy. © 2007 Elsevier Inc. All rights reserved.

Designing Climate Mitigation Policy

This paper provides an exhaustive review of critical issues in the design of climate mitigation policy by pulling together key findings and controversies from diverse literatures on mitigation costs, damage valuation, policy instrument choice, technological innovation, and international climate policy. We begin with the broadest issue of how high assessments suggest the near and medium term price on greenhouse gases would need to be, both under cost-effective stabilization of global climate and under net benefit maximization or Pigouvian emissions pricing. The remainder of the paper focuses on the appropriate scope of regulation, issues in policy instrument choice, complementary technology policy, and international policy architectures.

Carbon mitigation costs for the commercial building sector: Discrete-continuous choice analysis of multifuel energy demand

We estimate a carbon mitigation cost curve for the U.S. commercial sector based on econometric estimation of the responsiveness of fuel demand and equipment choices to energy price changes. The model econometrically estimates fuel demand conditional on fuel choice, which is characterized by a multinomial logit model. Separate estimation of end uses (e.g., heating, cooking) using the U.S. Commercial Buildings Energy Consumption Survey allows for exceptionally detailed estimation of price responsiveness disaggregated by end use and fuel type. We then construct aggregate long-run elasticities, by fuel type, through a series of simulations; own-price elasticities range from -0.9 for district heat services to -2.9 for fuel oil. The simulations form the basis of a marginal cost curve for carbon mitigation, which suggests that a price of $20 per ton of carbon would result in an 8% reduction in commercial carbon emissions, and a price of $100 per ton would result in a 28% reduction. © 2008 Elsevier B.V. All rights reserved.

Trust and efficiency

Agency problems within the firm are a significant hindrance to efficiency. We propose trust between coworkers as a superior alternative to the standard tools used to mitigate agency problems: increased monitoring and incentive-based pay. We model trust as mutual, reciprocal altruism between pairs of coworkers and show how it induces employees to work harder, relative to those at firms that use the standard tools. In addition, we show that employees at trusting firms have higher job satisfaction, and that these firms enjoy lower labor cost and higher profits. We conclude by discussing how trust may also be easier to use within the firm than the standard agency-mitigation tools. © 2002 Elsevier Science B.V. All rights reserved.

Co-regulation of nuclear respiratory factor-1 by NFkappaB and CREB links LPS-induced inflammation to mitochondrial biogenesis.

The nuclear respiratory factor-1 (NRF1) gene is activated by lipopolysaccharide (LPS), which might reflect TLR4-mediated mitigation of cellular inflammatory damage via initiation of mitochondrial biogenesis. To test this hypothesis, we examined NRF1 promoter regulation by NFκB, and identified interspecies-conserved κB-responsive promoter and intronic elements in the NRF1 locus. In mice, activation of Nrf1 and its downstream target, Tfam, by Escherichia coli was contingent on NFκB, and in LPS-treated hepatocytes, NFκB served as an NRF1 enhancer element in conjunction with NFκB promoter binding. Unexpectedly, optimal NRF1 promoter activity after LPS also required binding by the energy-state-dependent transcription factor CREB. EMSA and ChIP assays confirmed p65 and CREB binding to the NRF1 promoter and p65 binding to intron 1. Functionality for both transcription factors was validated by gene-knockdown studies. LPS regulation of NRF1 led to mtDNA-encoded gene expression and expansion of mtDNA copy number. In cells expressing plasmid constructs containing the NRF-1 promoter and GFP, LPS-dependent reporter activity was abolished by cis-acting κB-element mutations, and nuclear accumulation of NFκB and CREB demonstrated dependence on mitochondrial H(2)O(2). These findings indicate that TLR4-dependent NFκB and CREB activation co-regulate the NRF1 promoter with NFκB intronic enhancement and redox-regulated nuclear translocation, leading to downstream target-gene expression, and identify NRF-1 as an early-phase component of the host antibacterial defenses.

The environmental justice dimensions of climate change

Nations around the world are considering strategies to mitigate the severe impacts of climate change predicted to occur in the twenty-first century. Many countries, however, lack the wealth, technology, and government institutions to effectively cope with climate change. This study investigates the varying degrees to which developing and developed nations will be exposed to changes in three key variables: temperature, precipitation, and runoff. We use Geographic Information Systems (GIS) analysis to compare current and future climate model predictions on a country level. We then compare our calculations of climate change exposure for each nation to several metrics of political and economic well-being. Our results indicate that the impacts of changes in precipitation and runoff are distributed relatively equally between developed and developing nations. In contrast, we confirm research suggesting that developing nations will be affected far more severely by changes in temperature than developed nations. Our results also suggest that this unequal impact will persist throughout the twenty-first century. Our analysis further indicates that the most significant temperature changes will occur in politically unstable countries, creating an additional motivation for developed countries to actively engage with developing nations on climate mitigation strategies. © 2011, Mary Ann Liebert, Inc.

Where does energy R&D come from? Examining crowding out from energy R&D

Recent efforts to endogenize technological change in climate policy models demonstrate the importance of accounting for the opportunity cost of climate R&D investments. Because the social returns to R&D investments are typically higher than the social returns to other types of investment, any new climate mitigation R&D that comes at the expense of other R&D investment may dampen the overall gains from induced technological change. Unfortunately, there has been little empirical work to guide modelers as to the potential magnitude of such crowding out effects. This paper considers both the private and social opportunity costs of climate R&D. Addressing private costs, we ask whether an increase in climate R&D represents new R&D spending, or whether some (or all) of the additional climate R&D comes at the expense of other R&D. Addressing social costs, we use patent citations to compare the social value of alternative energy research to other types of R&D that may be crowded out. Beginning at the industry level, we find no evidence of crowding out across sectors-that is, increases in energy R&D do not draw R&D resources away from sectors that do not perform R&D. Given this, we proceed with a detailed look at alternative energy R&D. Linking patent data and financial data by firm, we ask whether an increase in alternative energy patents leads to a decrease in other types of patenting activity. While we find that increases in alternative energy patents do result in fewer patents of other types, the evidence suggests that this is due to profit-maximizing changes in research effort, rather than financial constraints that limit the total amount of R&D possible. Finally, we use patent citation data to compare the social value of alternative energy patents to other patents by these firms. Alternative energy patents are cited more frequently, and by a wider range of other technologies, than other patents by these firms, suggesting that their social value is higher. © 2011 Elsevier B.V.

Discounting the Benefits of Climate Change Policies Using Uncertain Rates

Evaluating environmental policies, such as the mitigation of greenhouse gases, frequently requires balancing near-term mitigation costs against long-term environmental benefits. Conventional approaches to valuing such investments hold interest rates constant, but the authors contend that there is a real degree of uncertainty in future interest rates. This leads to a higher valuation of future benefits relative to conventional methods that ignore interest rate uncertainty.

Discounting the distant future: How much do uncertain rates increase valuations?

We demonstrate that when the future path of the discount rate is uncertain and highly correlated, the distant future should be discounted at significantly lower rates than suggested by the current rate. We then use two centuries of US interest rate data to quantify this effect. Using both random walk and mean-reverting models, we compute the "certainty-equivalent rate" that summarizes the effect of uncertainty and measures the appropriate forward rate of discount in the future. Under the random walk model we find that the certainty-equivalent rate falls continuously from 4% to 2% after 100 years, 1% after 200 years, and 0.5% after 300 years. At horizons of 400 years, the discounted value increases by a factor of over 40,000 relative to conventional discounting. Applied to climate change mitigation, we find that incorporating discount rate uncertainty almost doubles the expected present value of mitigation benefits. © 2003 Elsevier Science (USA). All rights reserved.

Implications of shale gas development for climate change.

Advances in technologies for extracting oil and gas from shale formations have dramatically increased U.S. production of natural gas. As production expands domestically and abroad, natural gas prices will be lower than without shale gas. Lower prices have two main effects: increasing overall energy consumption, and encouraging substitution away from sources such as coal, nuclear, renewables, and electricity. We examine the evidence and analyze modeling projections to understand how these two dynamics affect greenhouse gas emissions. Most evidence indicates that natural gas as a substitute for coal in electricity production, gasoline in transport, and electricity in buildings decreases greenhouse gases, although as an electricity substitute this depends on the electricity mix displaced. Modeling suggests that absent substantial policy changes, increased natural gas production slightly increases overall energy use, more substantially encourages fuel-switching, and that the combined effect slightly alters economy wide GHG emissions; whether the net effect is a slight decrease or increase depends on modeling assumptions including upstream methane emissions. Our main conclusions are that natural gas can help reduce GHG emissions, but in the absence of targeted climate policy measures, it will not substantially change the course of global GHG concentrations. Abundant natural gas can, however, help reduce the costs of achieving GHG reduction goals.

Encouraging clean energy investment in developing countries: what role for aid?

A large portion of foreign assistance for climate change mitigation in developing countries is directed to clean energy facilities. To support international mitigation goals, however, donors must make investments that have effects beyond individual facilities. They must reduce barriers to private-sector investment by generating information for developers, improving relevant infrastructure, or changing policies. We examine whether donor agencies target financing for commercial-scale wind and solar facilities to countries where private investment in clean energy is limited and whether donor investments lead to more private investments. On average, we find no positive evidence for these patterns of targeting and impact. Coupled with model results that show feed-in tariffs increase private investment, we argue that donor agencies should reallocate resources to improve policies that promote private investment in developing countries, rather than finance individual clean energy facilities.

Dispersal and Integration in Female Chimpanzees

In chimpanzees, most females disperse from the community in which they were born to reproduce in a new community, thereby eliminating the risk of inbreeding with close kin. However, across sites, some females breed in their natal community, raising questions about the flexibility of dispersal, the costs and benefits of different strategies and the mitigation of costs associated with dispersal and integration. In this dissertation I address these questions by combining long-term behavioral data and recent field observations on maturing and young adult females in Gombe National Park with an experimental manipulation of relationship formation in captive apes in the Congo.

To assess the risk of inbreeding for females who do and do not disperse, 129 chimpanzees were genotyped and relatedness between each dyad was calculated. Natal females were more closely related to adult community males than were immigrant females. By examining the parentage of 58 surviving offspring, I found that natal females were not more related to the sires of their offspring than were immigrant females, despite three instances of close inbreeding. The sires of all offspring were less related to the mothers than non-sires regardless of the mother’s residence status. These results suggest that chimpanzees are capable of detecting relatedness and that, even when remaining natal, females can largely avoid, though not eliminate, inbreeding.

Next, I examined whether dispersal was associated with energetic, social, physiological and/or reproductive costs by comparing immigrant (n=10) and natal (n=9) females of similar age using 2358 hours of observational data. Natal and immigrant females did not differ in any energetic metric. Immigrant females received aggression from resident females more frequently than natal females. Immigrants spent less time in social grooming and more time self-grooming than natal females. Immigrant females primarily associated with resident males, had more social partners and lacked close social allies. There was no difference in levels of fecal glucocorticoid metabolites in immigrant and natal females. Immigrant females gave birth 2.5 years later than natal females, though the survival of their first offspring did not differ. These results indicate that immigrant females in Gombe National Park do not face energetic deficits upon transfer, but they do enter a hostile social environment and have a delayed first birth.

Next, I examined whether chimpanzees use condition- and phenotype-dependent cues in making dispersal decisions. I examined the effect of social and environmental conditions present at the time females of known age matured (n=25) on the females’ dispersal decisions. Females were more likely to disperse if they had more male maternal relatives and thus, a high risk of inbreeding. Females with a high ranking mother and multiple maternal female kin tended to disperse less frequently, suggesting that a strong female kin network provides benefits to the maturing daughter. Females were also somewhat less likely to disperse when fewer unrelated males were present in the group. Habitat quality and intrasexual competition did not affect dispersal decisions. Using a larger sample of 62 females observed as adults in Gombe, I also detected an effect of phenotypic differences in personality on the female’s dispersal decisions; extraverted, agreeable and open females were less likely to disperse.

Natural observations show that apes use grooming and play as social currency, but no experimental manipulations have been carried out to measure the effects of these behaviors on relationship formation, an essential component of integration. Thirty chimpanzees and 25 bonobos were given a choice between an unfamiliar human who had recently groomed or played with them over one who did not. Both species showed a preference for the human that had interacted with them, though the effect was driven by males. These results support the idea that grooming and play act as social currency in great apes that can rapidly shape social relationships between unfamiliar individuals. Further investigation is needed to elucidate the use of social currency in female apes.

I conclude that dispersal in female chimpanzees is flexible and the balance of costs and benefits varies for each individual. Females likely take into account social cues present at maturity and their own phenotype in choosing a settlement path and are especially sensitive to the presence of maternal male kin. The primary cost associated with philopatry is inbreeding risk and the primary cost associated with dispersal is delay in the age at first birth, presumably resulting from intense social competition. Finally, apes may strategically make use of affiliative behavior in pursuing particular relationships, something that should be useful in the integration process.