Climate change is one of the largest challenges of our time. This dissertation assesses the economics of water conservation programs in the face of increasing water scarcity and estimates the causal impact of education on people’s climate-related beliefs, behaviors, policy preferences and voting.

Chapter 1 focuses on takeup of water-conserving rebate campaigns in the U.S. Southwest, estimating a demand curve, neighbor spillovers, and heterogeneity for programs replacing thirsty grass lawns with drought-tolerant landscaping. I find strong evidence that households respond to rebate generosity: a 1% increase in generosity leads to a 0.93% increase in takeup. Each conversion leads to an additional 0.61 adoptions the following year. I also find substantial heterogeneity by race and wealth, with Hispanic rebate applicants 47% more likely than White applicants to have their application rejected, a disparity that completely disappears when using a contractor.

Chapter 2 uses thermal infrared satellite imagery to estimate temperature changes from such landscaping conversions in an event study analysis. Conversions increase summertime parcel temperatures by 0.6°C (1.1°F) with effects twice as large on the hottest 20% of days and for homes with the most removed vegetation. Using existing estimates from the literature, this implies annual heat costs of $1,675 per household, comprised of increased electricity usage ($48) and mortality risk ($306), as well as harder-to-quantify comfort values, diminished cognition, and costly adaptation behavior. In contrast, water savings are only $574-954 for a typical home, depending on water price.

Chapter 3 estimates the causal effect of education on pro-climate survey responses using variation in compulsory schooling laws across 20 European countries. An additional year of education increases pro-climate beliefs, behaviors, and policy preferences with no detectable effect on voting for green parties. Results are robust to the functional form specification of the time trend, the selection of included countries and reforms, as well as an alternative specification of the instrument.

Producing and consuming energy involves costly environmental externalities, which are addressed through a wide range of public policy interventions. This dissertation examines three economic questions that are important to environmental regulation in energy. The first chapter measures the effect of bankruptcy protection on industry structure and environmental outcomes in oil and gas extraction. The second chapter measures additionality in an appliance replacement rebate program. Finally, the third chapter focuses on the environmental impacts of subsidizing electricity production from forest-derived biomass fuels.

The first chapter measures the incentive effect of limited liability. When liability is limited by bankruptcy, theory says that firms will take excessive environmental and public health risks. In the long run, this ``judgment-proof problem'' may increase the share of small producers, even when there are economies of scale. I use quasi-experimental variation in liability exposure to measure the effects of bankruptcy protection on industry structure and environmental outcomes in oil and gas extraction. Using firm-level data on the universe of Texas oil and gas producers, I examine the introduction of an insurance mandate that reduced firms' ability to avoid liability through bankruptcy. The policy was introduced via a quasi-randomized rollout, which allows me to cleanly identify its effects on industry structure. The insurance requirement pushed about 6% of producers out of the market immediately. The exiting firms were primarily small and were more likely to have poor environmental records. Among firms that remained in business, the bond requirement reduced oil production among the smallest 80% of firms by about 4% on average, which is consistent with increased internalization of environmental costs. Production by the largest 20% of firms, which account for the majority of total production, was unaffected. Finally, environmental outcomes, including those related to groundwater contamination, also improved sharply. These results suggest that incomplete internalization of environmental and safety costs due to bankruptcy protection is an important determinant of industry structure and safety effort in hazardous industries, with significant welfare consequences.

The second chapter focuses on the importance of a regulator's inability to distinguish between households responding to a subsidy, and households doing what they would also have done in the absence of policy. Economists have long argued that many recipients of energy-efficiency subsidies may be ``non-additional,'' getting paid to do what they would have done anyway. Demonstrating this empirically has been difficult, however, because of endogeneity concerns and other challenges. In this paper we use a regression discontinuity analysis to examine participation in a large-scale residential energy-efficiency program. Comparing behavior just on either side of several eligibility thresholds, we find that program participation increases with larger subsidy amounts, but that most households would have participated even with much lower subsidy amounts. The large fraction of inframarginal participants means that the larger subsidy amounts are almost certainly not cost-effective. Moreover, the results imply that about half of all participants would have adopted the energy-efficient technology even with no subsidy whatsoever.

Finally, the third chapter addresses consequences of renewable energy subsidies in other markets. Electricity generated from logging residues provides a large and growing share of US renewable electricity generation. Much of the low-value wood used by biomass power plants might otherwise be left in the field. This increased harvest can negatively affect forest health. I investigate the supply of woody biomass fuel in Maine using a 15-year panel of prices and quantities for whole tree wood chips. I find that doubling the price of woody biomass increases harvest by about 64%. I also find that coal prices are a major determinant of woody biomass harvest. This suggests that environmental policies that raise the price of coal will affect forest health.