By Solomon Hsiang, Paulina Oliva, Reed Walker
Review of Environmental Economics and Policy, Volume 13, Issue 1
Most regulations designed to reduce environmental externalities impose costs on individuals and firms. A large and growing literature examines whether these costs are disproportionately borne by different sectors of the economy and/or across different groups of individuals. However, much less is known about how the environmental benefits created by these policies are distributed, which mirror the differences in environmental damages associated with existing environmental externalities. We review this burgeoning literature and develop a simple general framework for empirical analysis. We apply this framework to findings concerning the distributional impacts of environmental damages from air pollution, deforestation, and climate change and highlight priorities for future research. A recurring challenge to understanding the distributional effects of environmental damages is distinguishing between cases in which populations are exposed to different levels or changes in an environmental good and those in which an incremental change in the environment may have very different implications for some populations. In the latter case, it is often difficult to empirically identify the underlying sources of heterogeneity in marginal damages because damages may stem from nonlinear and/or heterogeneous damage functions. Nevertheless, understanding the determinants of heterogeneity in environmental benefits and damages is crucial for welfare analysis and policy design.
By Paulina Oliva, Fernando Aragón, Juan José
Journal of Environmental Economics and Management, 86
This paper examines the effect of air pollution on labor supply in Lima, Peru. We focus on fine particulate matter (), an important pollutant for health according to the medical literature, and show that moderate levels of pollution reduce hours worked for working adults. Our research design takes advantage of rich household panel data in labor outcomes to address omitted variables. This research design allows us to investigate whether the response to air pollution is non-linear. We find that the effect of moderate pollution levels on hours worked is concentrated among households with susceptible dependents, i.e., small children and elderly adults; while the highest concentrations affect all households. This suggests that caregiving is likely a mechanism linking air pollution to labor supply at moderate levels. We provide further evidence of this mechanism using data on children morbidity. Finally, we find no evidence of intra-household attenuation behavior. For instance, there is no re-allocation of labor across household members, and earnings decrease with air pollution.
By Rema Hanna, Paulina Oliva
The Future of Children, Climate Change Issue
Climate change may be particularly dangerous for children in developing countries. Even today, many developing countries experience a disproportionate share of extreme weather, and they are predicted to suffer disproportionately from the effects of climate change in the future. Moreover, developing countries often have limited social safety nets, widespread poverty, fragile health care systems, and weak governmental institutions, making it harder for them to adapt or respond to climate change. And the fact that many developing countries have high birth rates and high ratios of children to adults (known as high dependency ratios) means that proportionately more children are at risk there than in the developed world. In this article, Rema Hanna and Paulina Oliva delve into climate change’s likely implications for children in developing countries. Such children already face severe challenges, which climate change will likely exacerbate. In particular, most people in developing countries still depend primarily on agriculture as a source of income, and so anything that reduces crop yields—such as excessive heat or rain—is likely to directly threaten the livelihoods of developing-country families and their ability to feed their children. Poor nutrition and economic disruption are likely to lower children’s scholastic achievement or even keep them out of school altogether. Children in developing countries also face more-severe threats from both air and water pollution; from infectious and parasitic diseases carried by insects or contaminated water; and from possible displacement, migration, and violence triggered by climate change. How can we temper the threat to children in developing countries? Hanna and Oliva write that we should design and fund policies to shield children in developing nations from the harm caused by climate change. Such policies might include developing new technologies, inventing more-weather-resistant crops, improving access to clean water, increasing foreign aid during disasters, and offering more assistance to help poor countries expand their safety net programs.