Review of Environmental Economics and Policy

What is the impact of extractive industries such as oil, gas, and mining on gender equality? We seek to answer this question. A correlational analysis of cross-country data indicates that resource-dependent countries generally have greater gender inequality, lower education levels for men and women, lower absolute female welfare, and more conservative attitudes toward women. To further explore the relationship between extractive industries and gender equality, we review the empirical literature on extractive industries and their gender-specific effects. The literature review reveals that extractive industries have highly gender-specific effects, with economic impacts such as job creation interacting with gender norms (e.g., gender segregation in labor markets) to affect labor and marriage markets, fertility, and violence. Health, including sexual, reproductive, and infant health, is determined by environmental factors, such as pollution, but the negative effects of these environmental factors can be partly offset by economic opportunities. We argue that program evaluation research is needed to explore ways to strengthen the beneficial effects of extractive industries on gender equality while mitigating their undesirable effects.

This article discusses the use of green nudges—behavioral interventions aimed at reducing negative externalities—as an environmental policy instrument. We present a new framework for classifying nudges according to how they affect behavior. Pure nudges change the choice environment to guide behavior unobtrusively. Moral nudges trigger a psychological reaction to encourage behavior change. Our review of empirical studies reveals that green nudges, pure or moral, can have a significant impact on behavior and the environment but that the effects are highly context dependent. On the basis of both our review and basic welfare economics models, we discuss key factors for policy makers to consider when choosing between implementing a green nudge and implementing conventional policy instruments.

Almost all of the world’s energy demand growth is projected to occur in low- and medium-income countries (LMICs). Targeted energy efficiency investments have the potential to mitigate tensions between economic growth objectives and sustainable development commitments. We review the empirical evidence on both the private and social benefits of energy efficiency improvements in LMICs. In addition to direct energy savings, energy efficiency investments can generate indirect benefits such as improved reliability, enhanced energy access, and increased productivity. We highlight the role that energy subsidies, unreliable power supply, and capital constraints may play in the underinvestment in energy efficiency. Increasingly, LMICs are implementing policies and programs aimed at mitigating these barriers. We discuss some recent policy design innovations and emphasize the importance of rigorous evaluation.

Severe ambient water pollution is common in many developing countries. A broad array of regulatory and other policy instruments can be used to improve water quality. However, some approaches have been studied more than others, and there are many additional challenges that are specific to the developing country setting. This article describes a range of prescriptive and market-based regulations, voluntary programs, and other policy instruments to control water pollution and also reviews the empirical evidence on the effectiveness of these approaches in practice, with a focus on developing countries. We also examine additional challenges for implementing and assessing such policies in developing countries, including data availability and quality issues, insufficient monitoring and enforcement, rent-seeking in regulatory systems, and jurisdictional spillovers where regulation is decentralized. Finally, we highlight important gaps in the published empirical research in this area.

The decade from 2010 to 2019 marked a significant turning point in China’s approach to environmental regulation and pollution. This article describes the recent trends in air and water quality, with a focus on the 5 years following the Chinese government’s announcement of its “war on pollution” in 2014. We review the emerging literature that has taken advantage of recent improvements in data availability and accuracy to understand the social, economic, and health impacts of environmental pollution in China.

We examine the development of China’s environmental regulatory system over nearly 50 years and review economic studies of its effectiveness. China’s environmental regulation system has evolved over time into a complex and multilayered labyrinth. However, studies in the economics literature tend to focus on a few policies that span periods for which data are available and that allow causal identification. While the literature suggests that the policies have been generally effective in improving environmental quality, it also reveals several challenges for conducting empirical analyses: a firm’s regulatory status is frequently endogenous, data quality is variable, although improving over time, and overlapping policies may undermine traditional identification approaches. Further research is needed to comprehensively evaluate the cost-effectiveness of China’s environmental regulations, identify the interactions of multiple policies, and extend the analyses beyond water and air to also include soil and other types of pollution.

Since 2006, China has experienced an unprecedented expansion of its wind and solar power generation capacity and associated manufacturing industries. This rapid growth was supported by large subsidies that resulted in a significant and increasing government subsidy debt to renewable investors as well as a high curtailment rate for renewable electricity. This article reviews China’s renewable electricity development and policies between 2006 and 2020. First, we examine how China’s fixed feed-in tariff subsidies for wind and solar power generation under its planned electricity system distorted investment incentives and led to both the high subsidy debt and the high rates of curtailment. Then we discuss how and why the government shifted its renewable subsidy policy from fixed feed-in tariffs to auctions. We conclude with a discussion of additional policy reforms to support the continued development of renewable electricity in China.

Benefit–cost analysis (BCA) provides important science to inform regulatory decision-making. Ideally, the BCA should be based on science, including economics. However, the prominent role of BCA in the policy-making process also creates an incentive to adopt practices that produce results that support a preferred policy. Indeed, rather than informing decision-making, BCA can become a tool for justifying a decision that is made by manipulating results in ways contrary to good science. This article identifies two challenges that threaten the scientific integrity of a BCA because they allow normative and policy judgments to enter into the BCA. The article concludes by identifying actions to help protect the scientific integrity of BCA.

Governments around the world are planning to accelerate their efforts to decarbonize and electrify their transportation sector. In this article, I describe the key role charging stations play in electric vehicle (EV) markets and discuss how a lack of charging infrastructure can pose a barrier to EV adoption. Then I discuss Norway’s experience with incentives for charging infrastructure and consumer subsidies. I conclude by highlighting key lessons from Norway and their implications for designing effective policies to support EV adoption.