Chapter 1 investigates the distributional impacts of a unique car purchase lottery in Beijing on the housing market. I use a difference-in-differences approach to compare heterogeneous neighborhoods before and after implementation of the policy. At an aggregate scale, housing prices within Beijng's fourth ring road increase by 1 to 2% while those outside the fifth ring road decrease by 5%. This is equivalent to transferring about 115,000 RMB ($17,000) from each apartment owner outside the fifth ring to those within the fourth ring. The disaggregate effects are even more pronounced: housing prices increase at locations close to common destinations (employment centers: 5%; primary schools: 3%) and alternative transportation (subway: 3%; buses: 4%). These changes reflect capitalization of the automobile policy and imply a large, and likely unexpected, redistribution across homeowners. The results are relevant to policy, both in the context of unintended consequences and for efforts to develop offsetting measures.

Chapter 2 uses the roll-out of a large transmission expansion in Texas' electricity market to measure the market and non-market impacts of the transmission expansion on benefits of increased renewable capacity. We find large market benefits leading to a payback period of roughly 14 years. However, total welfare improvements from reduced congestion depend on how global non-market externalities are internalized by regional policy makers: accounting for non-market externalities reduces the payback period of this project from 14 to less than 9 years. We discuss the finding's implications for the welfare of regional decisions to build transmission capacity for the U.S. wholesale electricity market in response to federal renewable subsidies.

Chapter 3 investigates the impact of extreme temperature on risk by leveraging daily temperature variation with sales of a "risky" good---Powerball tickets. Temperature and shopping trips are connected through avoidance behavior, leading me to jointly consider trips to retail stores in the analysis. The results show that sales of the risky good per trip increase substantially with temperature, demonstrating a novel dimension in the connection between temperature extremes and human behavior.

I study the impacts of climate and environmental change and subsequent consequences for adaptation and mitigation. In Chapter 1, I use a difference in differences design to show that California households exposed to a severe heat wave are differentially more likely to adopt central air conditioning units than those less exposed, controlling for historical climate. Using these "induced adopters" to predict take-up, I show that induced adopters have a significant increase in their summer energy demand 3 years following the heat wave, with insignificant effects on their winter electricity demand. In addition, I present a theoretical framework where household belief-updating about the climate rationalizes heterogeneity in household learning about the climate that cannot be explained by myopia or alternative channels.

In Chapter 2, I measure the impact on land-use change on flood risk. This study examines this by quantifying the effects of land-use change on flood damages in the state of Texas. I link claims data from the National Flood Insurance Program to a series of land-use changes to construct a tract-by-month panel, and use exogenous variation in precipitation across tract-months to estimate the effect of changes in land use on the frequency and magnitude of new flood insurance claims. I find that increases in impervious surface development within a tract increase flood insurance claims, while increases in wetland, water, and other natural covers decrease these claims. In addition, using variation in tract-level elevation, I show that land-use change in neighboring geographies affects own-tract flood risk. Overall, these results suggest existence of spatial spillovers from land use and imply returns to coordination in land-use policy.

In Chapter 3, co-authored with Remy Levin, we show that individuals in a panel survey in Indonesia and Mexico exhibit changes in observed choices over a risky lottery as a result of changes in experienced temperature and precipitation levels and volatility. We use a counterfactual measure of risk under the assumption of no response to climate variables to show that total social welfare is higher under the observed distribution of risk. We interpret this as risk adaptation to climate.

Chapter 1 analyzes optimal policy when consumers of energy-using durables deviate from a neoclassical benchmark due to misperception of future energy costs and/or prosocial preferences. These two behavioral deviations can either offset or compound for any given individual, creating groups of observationally equivalent consumers. Whereas optimal policy depends crucially on the behavioral rationale underlying choices. We characterize optimal second-best policy in the simultaneous presence of myopia and prosociality. Our theoretical analysis and simulation results demonstrate that the occurrence of prosocial behavior in addition to myopia strengthens product subsidies while concurrently reducing energy taxes. The added dimension of heterogeneity interferes with policy targeting and may limit potential welfare gains from the second-best policy.

Chapter 2 explores the interaction between financial purchase subsidies and charging infrastructure development in promoting electric vehicle (EV) adoption. Leveraging survey data from the Clean Vehicle Rebate Project (CVRP) and spatial information on charging stations, we find a significant positive impact of higher charging station density on self reported essentiality of CVRP rebates in EV acquisition decisions. The results exhibit substantial heterogeneity between low- and high-income individuals due to their divergent refueling necessities. Our findings reveal a mutually beneficial relationship between improving charging prevalence and providing purchase subsidies, advocating a hybrid policy formulation combining these two types of incentives to optimize the overall cost-effectiveness in accelerating EV adoption.

Chapter 3 investigates the impacts of incorporating family size into increasing block pricing (IBP) of residential electricity on social equity and efficiency. We first identify heterogeneous electricity demand elasticity between small and large families using an instrumental variable approach. We then conduct a comparative analysis between the IBP with and without the family-size adjustment by assessing their redistributional outcomes and transfer-related costs compared to a break-even flat rate. Our analysis reveals that the family-size-based IBP can generate intended redistributional outcomes with limited efficiency costs, regardless of whether per capita or total income is prioritized for evaluating social equity. Conversely, the IBP without considering family size mistakenly collects money from households with the lowest per-capita income. These findings suggest incorporating family-size-based criteria into electricity pricing could be a promising way to efficiently improve social equity.

This dissertation consists of three chapters, linked by the theme of analyzing household behavioral responses to environmental policies. Chapter 1 investigates the behavioral response of households receiving a composting program expansion, in particular when they can throw food scraps into their compost, and analyzes the effect on methane emissions reductions. Chapter 2 investigates the effect of carbon cap and trade permit and low-carbon fuel standard credit prices on consumer gasoline purchases, and compares the effect size to gasoline taxes and gasoline price increases unrelated to either policy. Chapter 3 investigates the heterogeneity in responses to water quality violations by examining how different demographic groups respond to these violations.

This dissertation contains three essays exploring how economic agents and markets respond to weather events and natural disasters.

Chapter 1 examines whether short-run weather fluctuations affect the decision to go solar by residential customers in California. The results show that residential customers whose sign-ups are followed by less sunny weather are more likely to cancel their contracts. This behavior is inconsistent with rationality, as a solar PV system is a long-term investment whose return is not affected by short-run weather fluctuations. I analyze this behavior further using a theoretical model of projection bias combined with engineering models of solar power production and energy demand.

Chapter 2 studies housing market responses to hurricanes using detailed data on Florida housing markets during 2000-2016. We identify the causal effects of hurricanes in a difference-in-differences framework exploiting the exogeneity of hurricane path and timing. The results show that the housing market is dominated by a negative supply shock lasting up to three years. While these effects are transitory, we show that they are associated with the arrival of home buyers whose income is higher, holding fixed the quality of homes transacted. This implies a lasting shift in the local economic profile towards higher income, along with potential gentrification.

Chapter 3 investigates whether and how voters’ preferences on environmental policy are reflected in legislative elections. People’s belief in climate change is known to be affected by experiencing extreme weather events. We study the electoral responses to these randomly occurring events in House of Representative elections. To focus on the channel of environmental preference, we estimate differential responses based on the environmental ideology of the incumbent congressperson conditional on party membership. We find evidence that climate-related extreme weather events motivate political giving to challengers of anti-environment incumbents, increase the overall competitiveness in these races, and lead to a lower probability of re-election for these incumbents.

This dissertation investigates the impact of environmental policies on firm performance and global supply chain relationships through three chapters. The first chapter introduces a novel measure of embodied carbon policy costs, incorporating multi-region input-output linkages, to examine the effects of carbon pricing on industrial firm outcomes in Europe. The findings reveal that the inclusion of indirect costs via the global value chain leads to a decrease in firm employment and output, and an increase in total factor productivity and investment, with more pronounced impacts for small and capital-intensive firms.

The second chapter explores the transmission mechanism of sustainable investing on firms' financial performance and real outcomes. Focusing on the prevalent portfolio tilting strategy in practice, we delineate the transmission mechanism from investor preference, intermediated by funds, to underlying firms. Leveraging a 2016 natural experiment for identification, we find that firms with greater exposure to low-sustainability fund ownership experience acute downward pressure on their valuation and equity financing. However, no significant impact is observed on firm debt financing, consistent with our observation that the transmission of investors' pressure for sustainability falls short of generating substantial real impacts on firms' investment decisions.

The third paper examines the impact of environmental regulations on global supply chain relationships using a dataset linking customer firms to their suppliers. The study reveals that customers are more likely to terminate supplier relationships in response to more stringent environmental policies in supplier countries, with the effect being less pronounced for manufacturing customer firms and suppliers located in countries with emissions trading systems. Further analysis shows a relatively limited impact of the average supplier country's Environmental Policy Stringency on customer firms' performance, possibly due to low switching costs and competitive supplier markets.

The Learning Companion to Bending the Curve: Climate Change Solutions can help all readers gain the most from this book. This resource includes questions for review and discussion which help connect ideas, understand key concepts, and to increase the ability of readers at all levels to effectively discuss and explain climate change solutions.

The Learning Companion provides review questions that can be used to assess familiarity with key concepts, ensuring all readers are ready to apply what they’ve learned. These questions can also help instructors identify areas of learning that may require additional explanation. The Learning Companion also provides questions for discussion which can help facilitate both classroom and public discourse, and expanding each reader’s learning about climate change solutions

We recognize the importance of public communication and education to help promote a broad culture of climate action. Using the questions in the Learning Companion can help you take action, and to collaborate with others as a learning community, focused on climate change solutions.