Regional Climate Policies & Decarbonizing Electricity
Local Impacts of Oil and Gas Production
Can Learning Explain Deterrence? Evidence from Oil & Gas Production, Journal of the Association of Environmental and Resource Economists, conditional acceptance
An Examination of Geographic Heterogeneity in Price Effects of Superfund Site Remediation (with Ralph Mastromonaco), Economics Letters, 2018
Leakage in Regional Environmental Policy: The Case of the Regional Greenhouse Gas Initiative (with Harrison Fell), Journal of Environmental Economics and Management, 2018
The Local Employment Impacts of Fracking: A National Study (with Ralph Mastromonaco), Resource and Energy Economics, 2017
Jurisdictional Tax Competition and the Division of Nonrenewable Resource Rents (with Dale Manning), Environmental and Resource Economics, 2017
An Estimate of the Producer Cost of Liability for Oil Spills, Applied Economics Letters, 2017
Why Have Greenhouse Emissions in RGGI States Declined? An Econometric Attribution to Economic, Energy Market and Policy Factors (with Brian Murray), Energy Economics: Volume 51, September 2015, Pages 581-589
The level and distribution of the costs of tradable allowance schemes are important determinants of whether the regulation is ultimately enacted. Theoretical and simulation models have shown that updating allowance allocations based on firm emissions or output can improve the efficiency of the scheme by acting as a production subsidy. Using the U.S. NOx Budget Program (NBP) as a case study, this analysis tests whether power plants in states which chose an updating allocation increase their electricity production relative to plants in states that chose a fixed allocation. Results find that updating allocations led to a 5 percentage point increase in capacity factors for natural gas combined cycle generators and no effect or a modest decrease for coal generators. These findings imply that an updating allocations confers a modest but meaningful subsidy to production relative to a fixed allocation and that firm responses are heterogeneous based on production technology and market conditions.
Effects of State Taxation on Investment: Evidence from the Oil Industry (with Jason Brown and Dale Manning)
We provide theoretical and empirical evidence that ﬁrms do not in general respond equally to changes in prices and taxes in the setting of oil well drilling in the United States. Our key theoretical contribution is that in a multi-state model, a change in output price changes both the beneﬁt and opportunity cost of drilling, whereas a change in a state tax rate only changes the beneﬁt of drilling in that state. Thus, a ﬁrm responds more to a change in tax than a change in price. Our econometric results support this theoretical prediction. We ﬁnd that a one dollar per barrel increase in price leads to a 1 percent increase in wells drilled, but a one dollar per barrel increase in tax leads to at least an 8 percent decrease in wells drilled. These estimates correspond to elasticities of about 0.5 and -0.3, respectively. These results are robust to interstate spillovers, other state regulations, and econometric speciﬁcation. They imply that using state tax rate decreases to incentivize investment may lead to losses of government revenue.