Journal Round Up for Q1 2024

Journal Round Up for Q1 2024

Climate Change Adaptation in Local Municipalities

The sharp rise in extreme weather events such as floods and heat waves have increased the need for governing bodies to adapt. The general consensus indicates that municipal governments are best positioned to do this given their unique and proximate knowledge of local infrastructure needs. Accordingly, this study comprises a literature review of local municipalities in all seven continents to find common trends and challenges with climate change adaptation measures. The study placed an emphasis on larger cities due to their strong fiscal capacities as well as their increased likelihood of attaining international funding. Specifically, the paper focuses less on policy measures and more on the capacity of municipalities to implement adaptation measures. 

Bridge Closed
Bridge Closed” by Me in ME is licensed under CC BY 2.0.

The paper found several general trends. For one, adaptation policy, to varying degrees, has been hampered by both political and financial limitations. This is especially pronounced in smaller municipalities, where lack of capital and human wherewithal significantly limits the potential for adaptation measures. Overall, financial difficulties can largely be attributed to a small tax base and a lack of economic diversification.

In addition, it was found that efforts were hampered by uncertainty around which levers of government were actually responsible for crafting and implementing adaptation measures. Generally, localized government would presumably be responsible, but centralized government across numerous states have hindered local efforts or attempted to fill the void themselves. Ultimately, the literature suggests there are significant administrative and political impediments in the way of crafting and implementing climate change adaptation measures. 

Wind Turbines and Property Values

As demand for alternative energy sources increases, the construction of wind turbines has steadily increased over the years. However, one of the biggest concerns surrounding wind turbines is concern over its potential impact on property values. To address this concern, this article engages in a comprehensive study on the topic. Previous studies around adverse property values have come back with starkly different conclusions, so there is no general academic consensus on this topic. This study differentiates itself by focusing specifically on wind farms/wind turbines. 

Overall, the results found that for properties within 1.89 miles of a wind turbine, property values changed by -0.68%, while properties farther than 2.8 miles had virtually no effect. For policy makers, this study helps alleviate concerns about the construction of wind farms as well as indicating what level of compensation may be necessary for homeowners. Ultimately, this topic needs to be studied more, as the author notes, but this article nevertheless represents an important milestone on the potential adverse effects of wind turbines on property values. 

Impact of Wind Energy on Air Pollution

Renewable energy has become an increasingly desirable alternative to fossil fuels due to its ability to better preserve natural resources, reduce pollution, and create cheaper energy. Subsequently, investment in renewable energy has increased substantially over the last decade, and wind energy now accounts for 8.2% of the American energy market. While there is a general consensus that wind energy is more environmentally friendly, there is less consensus on what form that takes. 

This study, conducted in Texas, assesses the impact of wind energy on air pollution. To conduct the analysis, data was collected across three primary categories: electricity generation, meteorological and air quality, and emergency department admission records. The authors hypothesized that because wind generation does involve the releasing of emissions wind energy would be associated with less pollution across the state. Results demonstrated that the generation power from wind energy was associated with less air pollution. However, results varied both spatially and temporally.  The results found that areas near coal plants benefited more from wind energy (in terms of less air pollution than areas that were not close to existing coal plants. The effect of wind generation on air pollution rates appears to increase in magnitude (i.e., become more negative) when more wind generation comes during grid-uncongested hours (such as at night, when demand for power is lower) and during off-peak wind periods. The results suggest that wind energy is associated with less air pollution, resulting in greater human health benefits, but that reducing grid congestion could increase the size of that effect. 

Effect of Lake Water Quality on Home Prices

Lakes are an appealing environmental amenity that provides recreational, aesthetic, and ecosystem benefits. Environmental economists (like us at rbouvier consulting) are often asked to measure the economic benefit of cleaner lake water quality. While there have been many studies demonstrating the relationship between cleaner lake water quality (typically measured by water clarity) and property values, there have been few studies that have attempted to determine whether that relationship is constant across regions of the United States. 

This study attempts to answer that question by using data from Zillow’s former Transaction and Assessment Database. Unfortunately for researchers, results suggest that no, there is no one definitive “number” that can be used to assess the relationship between water quality and property values. The elasticity of property values to lake water quality (i.e., the responsiveness of property values to lake water quality) varies significantly across regions, and any attempt to “smooth out” the relationship by looking at larger spatial scales could result in bias. Also of interest (at least, to practitioners) is that the choices made by the investigator in modeling the relationship may also be a source of variability. 

The authors therefore recommend caution in “transferring model results across spatial boundaries.” For those reasons, any further attempt to determine the relationship between lake water quality and property values should be conducted at a local scale. 

Rachel’s journal selections were summarized by Connor Feeney this quarter from the following publications.

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