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Adaptation and Mitigation: Essays on Climate Economics


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.

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