Adapting to Climate Change: The Remarkable Decline in the U.S. Temperature-Mortality Relationship over the 20th Century

NBER WP: Adaptation is the only strategy that is guaranteed to be part of the world's climate strategy. Using the most comprehensive set of data files ever compiled on mortality and its determinants over the course of the 20th century, this paper makes two primary discoveries. First, we find that the mortality effect of an extremely hot day declined by about 80% between 1900-1959 and 1960-2004. As a consequence, days with temperatures exceeding 90°F were responsible for about 600 premature fatalities annually in the 1960-2004 period, compared to the approximately 3,600 premature fatalities that would have occurred if the temperature-mortality relationship from before 1960 still prevailed. Second, the adoption of residential air conditioning (AC) explains essentially the entire decline in the temperature-mortality relationship. In contrast, increased access to electricity and health care seem not to affect mortality on extremely hot days. Residential AC appears to be both the most promising technology to help poor countries mitigate the temperature related mortality impacts of climate change and, because fossil fuels are the least expensive source of energy, a technology whose proliferation will speed up the rate of climate change.

Trade Restrictions and Conflict Commodities

New OxCarre Paper by Seitz: In this paper, I use an event study approach to investigate the claim that conflict minerals legislation in the United States led to a ban on some mining exports from the Democratic Republic of the Congo (DRC), and that the passage of US regulation caused a ban on both production and trade by regulators in the DRC several months later. I also consider the assertion that conflict minerals legislation imposed severe costs for companies that report to the Securities and Exchange Commission in the US.
I find that returns for some companies traded on US stock exchanges were sensitive to changes in production in the DRC after the proposed legislation became law in the US. This either suggests that some financial market participants did not expect an immediate full embargo on newly-regulated Congolese mining and trading activities, or that market participants did not expect trade to be halted indefinitely. Reactions to a DRC-imposed ban on production were statistically significant; indicating that additional reductions in trade were not fully anticipated by financial market participants after regulations became law in the US.
I also find that among metal and gold mining companies traded on US exchanges, returns were abnormally high when conflict mineral legislation became more probable. Electronic communication manufacturing firms, which as a group were a target for many supporters of conflict mineral regulations, experienced no systematically abnormal returns corresponding to important dates in the US legislative process that I consider, but experienced abnormally positive returns coinciding with the ban on mining in the eastern DRC.

Macroeconomic effects of oil price shocks in Brazil and in the United States

Applied Energy: This paper studies the effects of oil price shocks in the last 30 years on the Brazilian and American inflation rate and rhythm of economic activity. The Brazilian and the United States economies are interesting polar cases, since they had a completely different path on the oil import dependence rate. While the oil import dependence rate has increase sharply in the United States (US), it has decreased substantially in Brazil. We found that output growth volatility in the United States has been decreasing over time as well as the contribution of oil price shocks to such volatility, despite the increase in oil import dependence. Inflation volatility has also been decreasing but oil price shocks are accounting for a larger fraction of this volatility in the US. In Brazil, such shocks do not seem to have a clear impact on output growth and they account for a very small fraction of the Brazilian inflation and output growth rate volatility. We finally run some counterfactual experiments to analyze how real output growth in the United States would had been if net oil import share in the United States behaved similarly to what was observed in Brazil. We conclude that output level would be roughly the same, however, it would be about 10% less volatile if the US had the actual Brazilian oil import share.

Coal in the US and Europe's energy policy

The Economist: Why is the world’s most harmful fossil fuel being burned less in America and more in Europe? The first of two stories looks at America’s cheap gas and new rules. [The second says] Europe’s energy policy delivers the worst of all possible worlds

Oil price shocks and stock market activities: Evidence from oil-importing and oil-exporting countries

Journal of Comparative Economics: While the relationship between oil prices and stock markets is of great interest to economists, previous studies do not differentiate oil-exporting countries from oil-importing countries when they investigate the effects of oil price shocks on stock market returns. In this paper, we address this limitation using a structural VAR analysis. Our main findings can be summarized as follows: First, the magnitude, duration, and even direction of response by stock market in a country to oil price shocks highly depend on whether the country is a net importer or exporter in the world oil market, and whether changes in oil price are driven by supply or aggregate demand. Second, the relative contribution of each type of oil price shocks depends on the level of importance of oil to national economy, as well as the net position in oil market and the driving forces of oil price changes. Third, the effects of aggregate demand uncertainty on stock markets in oil-exporting countries are much stronger and more persistent than in oil-importing countries. Finally, positive aggregate and precautionary demand shocks are shown to result in a higher degree of co-movement among the stock markets in oil-exporting countries, but not among those in oil-importing countries.

Iraq's Oil Surge Could Threaten the Saudis

Bloomberg BusinessWeek: Though there was no major dissension at OPEC’s Dec. 12 meeting in Vienna, there were signs that Saudi Arabia and Iraq are headed for a face-off over how much oil to pump. Before the start of the meeting, Abdul Kareem Al-Luaibi, Iraq’s oil minister, told reporters that his country plans to produce as much oil next year as it did when Saddam Hussein came to power more than three decades ago—a substantial increase over its 2012 output. Saudi Arabia, in contrast, has started to cut production to limit the risk of a price decline in 2013...

Oil and Conflict: What Does the Cross Country Evidence Really Show?

AEJ Macro: This paper re-examines the effect of oil wealth on political violence. Using a unique historical panel dataset of oil discoveries, we show that simply controlling for country fixed effects removes the statistical association between the value of oil reserves and civil war onset. Other macro-political violence measures, such as coup attempts, are also uncorrelated with oil wealth. To further address endogeneity concerns, we exploit changes in oil reserves due to randomness in the success of oil explorations. We find little robust evidence that oil discoveries increase the likelihood of political violence. Rather, oil discoveries increase military spending in nondemocratic countries.