Michael Greenstone

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Michael Greenstone
Michael Greenstone, UChicago.png
Michael Greenstone
Born (1968-12-06) December 6, 1968 (age 55)
United States
EducationSwarthmore College (BA, High Honors) Princeton University (Ph.D.)
OccupationAmerican economist
Website https://www.michaelgreenstone.com/

Michael Greenstone is an American economist and the Milton Friedman Distinguished Service Professor in Economics, the College, and the Harris School of Public Policy at the University of Chicago. He serves as director of the Energy Policy Institute at the University of Chicago (EPIC), director of the Becker Friedman Institute, and co-chair of the Energy and Environment sector at Abdul Latif Jameel Poverty Action Lab (J-PAL). Under the first Obama administration, he served as chief economist on the Council of Economic Advisors. His research interests focus on the nexus between development economics and environmental economics. [1]

Contents

Biography

Born in the United States, Michael Greenstone earned a B.A. in economics with High Honors from Swarthmore College in 1991, where he starred and lettered for the men’s basketball team, and a Ph.D. in economics from Princeton University in 1998. Thereafter, he worked as a Robert Wood Johnson Scholar at the University of California, Berkeley (UCB, 1998-2000) before becoming an assistant professor of economics at the University of Chicago (2003–06). In 2006, Greenstone moved to MIT, first as associate professor (2003–06) and then as the 3M Professor of Environmental Economics (2006–14). During his tenure at MIT, Greenstone also held visiting appointments at UCB, the University of California Energy Institute, and Stanford University. Most recently, in 2014, he followed a call back to the University of Chicago, where he was made the Milton Friedman Professor in Economics and the College. [2] At the University of Chicago, he further holds positions as director of the Becker Friedman Institute for Economics (BFI), [3] director of the Energy Policy Institute at Chicago (EPIC), [4] and faculty director of the Environment and Energy Lab at the University's Urban Labs. [5] Additionally, Greenstone currently serves among else as co-chair of J-PAL's Environment and Energy sector (with Mushfiq Mobarak), [6] director of the Energy Research Programme at the International Growth Centre (IGC), [7] faculty director of the E2e Project, [8] a fellow of the American Academy of Arts and Sciences [9] and a non-resident senior fellow at the Brookings Institution. [10] In the past, he has been e.g. a chief economist on the Council of Economic Advisors (2009–10) under the first Obama administration, a member of the advisory board to the Secretary of Energy under the Trump administration (2015–17), a co-director of IGC's Climate Change, Environment and Natural Resources Research programme (2010–13), and a director of the Hamilton Project (2010–13). [11] Finally, in terms of professional service, Michael Greenstone sits on the board of editors of the Review of Environmental Economics and Policy [12] and has been an editor of the Journal of Political Economy (2015–17), Review of Economics and Statistics (2007-10), and held positions on the boards of editors of the American Economic Journal: Economic Policy and the Journal of Economic Literature . [13]

Michael Greenstone is married to Katherine Ozment, a secularist writer. [14] [15]

Research

Michael Greenstone's research interests include environmental economics, energy economics, public finance, development economics, labour economics, and health economics.; [16] in particular, he is a pioneer of the study of environmental issues in developing countries, an emerging field dubbed "envirodevonomics". [17] According to IDEAS/RePEc, he currently (February 2018) belongs to the top 1% of highest ranked economists in terms of research publications. [18]

Economic effects of air pollution

To investigate how does air pollution affects economic outcomes, Michael Greenstone and Kenneth Y. Chay used geographic variation in the reduction of air pollution due to the 1981-82 recession to estimate the impact of air pollution on infant mortality in the U.S.; they found that reducing TSPs by 1% results in a 0.35% decline in the county-level mortality rate of infants, with most of the reduction concerning newborn deaths, in particular among African Americans. [19] In another study with Chay, Greenstone explored the impact of the U.S. 1970 and 1977 amendments to the Clean Air Act, which set a federal ceiling for total suspended particulates (TSPs), empowered the newly created Environmental Protection Agency to designate "non-attainment" counties in excess of that ceiling, and to impose strict air quality regulations on polluters in such counties, on housing prices, to study the relationship between housing prices and air quality. They found that the legislation was effective in reducing TSP air pollution and, based on an elasticity of housing values with regard to TSP concentration ranging from -0.20 to -0.35, that the improvements in air quality between 1970 and 1980 attributable to the regulations imposed under the non-attainment designation caused an increase of housing values in non-attainment counties worth $45 billion. [20] However, Greenstone also found that the Clean Air Act's non-attainment designation probably played only a minor role in the 80% reduction of sulfur dioxide (SO2) concentrations in the United States, possibly because regulators assigned the SO2 non-attainment designation to many counties that hadn't even exceeded SO2 ceilings for a single day and consequently didn't impose excessively strict regulatory oversight. [21] Finally, Greenstone also analysed the impact of the 1970 and 1977 Clean Air Act Amendments on industrial activity in the U.S. and found that pollution-intensive in "non-attainment" counties lost ca. 590,000 jobs, $37 billion in capital stock, and $75 billion (at 1987 U.S. dollars) of output over 1972-87 as a consequence of the greater regulatory oversight exercised by EPA. [22]

Economic effects of climate change

Together with Olivier Deschênes, Michael Greenstone initially found that climate change will increase agricultural profits in the U.S. over 2010-2100 by an average of $1.3 billion per year (in 2002 U.S. dollars) and that the measurement of climate change effects on land prices (the hedonic approach) is extremely sensitive to seemingly minor choices about control variables, sample, and weighting. [23] However, following Fisher et al.'s (2012) critique with regard to data coding errors and conceptual oversights in Deschênes and Greenstone (2007), [24] Deschênes and Greenstone subsequently re-estimated climate change to decrease U.S. agricultural profits by $4.5 billion per year over 2010-2100. [25] In another collaboration, Greenstone and Deschênes study the relationship between climate change and mortality and its mitigation through adaptation, and estimate that under "business-as-usual" scenarios climate change will increase the age-adjusted mortality rate in the U.S. by 3% by the end of the 21st century, though this effect may be strongly mitigated through populations adapting to the expected increase in the frequency of extreme temperature days. [26]

Environmental and energy economics

Together with Hunt Allcott, Greenstone reconsiders the evidence in favour of an energy efficiency gap, i.e. whether consumers and firms fail to invest as much into energy efficiency as the expected increases in terms of utility or profits due to such investments would warrant. Overall, they cannot substantiate claims of a widespread energy efficiency gap, though their differentiation of specific investment inefficiency types leads them to conclude that policies aimed at addressing a supposed energy efficiency gap must be targeted to those consumer subject to investment inefficiencies if they are to be at all effective. [27]

How much do people value the removal of hazardous waste? Investigating this question, Greenstone and Justin Gallagher use a regression discontinuity design to compare the reaction of housing market prices at hazardous waste sites that narrowly qualified to benefit from Superfund cleanups relative to those who narrowly missed qualifying. They find the reaction to be economically small and statistically insignificant, suggesting that the average local benefits of Superfund cleanups are likely to be much lower than the cleanups' average cost of $43 million. [28]

In environmental economics as well as in other areas, Greenstone has strongly advocated for the greater application of (quasi-)experimental methods to identify which policies are effective and efficient in terms of increasing social welfare. [29]

Miscellany

How does the opening of a new manufacturing plant affect the productivity of incumbent manufacturing plants? Studying this question with Richard Hornbeck and Enrico Moretti, Greenstone finds that the TFP of incumbent plants in counties that were selected as the site for the opening of a new plant increase 12% more than in their runner-up competitors, with the agglomeration spillovers being particularly large if the old and new plants are similar. However, they also find that the wage growth in "winning" counties caused by the increased local labour demand tends to exceed productivity growth, thus reducing plant profits. [30]

Exploiting the 1987 federal permission to U.S. states to only raise the speed limit on their rural interstates from 55 mph (ca. 90 kmh) to 65 mph (ca. 105 kmh), Greenstone and Orley Ashenfelter compare the time saved due to the increase in speed limit with the increase in fatality rates (an increase of ca. 35%) to estimate the value of a statistical life. They find that approximately 125,000 hours were saved per lost life, suggesting (if hours saved are valued at the average hourly wage) an upper bound of $1.54 million (in 1997 U.S. dollars) as a value of a statistical life. [31]

Finally, Greenstone, Paul Oyer and Annette Vissing-Jorgensen use the extension of mandatory disclosure requirements under the 1964 Securities Acts Amendments from listed stock to over the counter (OTC) stock trades on stock returns. They find that the announcement of compliance with disclosure requirements by those OTC firms most likely to be affected by the change in regulation was accompanied by abnormal excess stock returns of ca. 3.5% in the weeks surrounding the announcement and that expectations regarding the extension of regulations resulted in abnormal excess returns ranging from 11.5 to 22.1% in the period between legislative proposal and enforcement, suggesting large-scale insider trading at OTC firms. [32]

Current Work

Greenstone’s research has influenced policy domestically and internationally. His current work involves testing innovative ways that aim to increase developing countries' energy access and improve the efficiency of environmental regulations across the world. Greenstone is a co-director of the Climate Impact Lab where he is producing numerically-based estimates of the local and global impacts of climate change. Further, he developed the Air Quality Life Index™ [33] that converts air pollution concentrations into their impact on life expectancy and co-founded Climate Vault, a 501(c)(3) that uses markets to allow institutions and people to reduce their carbon footprint. [34]

Related Research Articles

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Pollution is the introduction of contaminants into the natural environment that cause adverse change. Pollution can take the form of any substance or energy. Pollutants, the components of pollution, can be either foreign substances/energies or naturally occurring contaminants.

<span class="mw-page-title-main">Emissions trading</span> Market-based approach used to control pollution

Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). One prominent example is carbon emission trading for CO2 and other greenhouse gases which is a tool for climate change mitigation. Other schemes include sulfur dioxide and other pollutants.

<span class="mw-page-title-main">Environmental economics</span> Sub-field of economics

Environmental economics is a sub-field of economics concerned with environmental issues. It has become a widely studied subject due to growing environmental concerns in the twenty-first century. Environmental economics "undertakes theoretical or empirical studies of the economic effects of national or local environmental policies around the world. ... Particular issues include the costs and benefits of alternative environmental policies to deal with air pollution, water quality, toxic substances, solid waste, and global warming."

<span class="mw-page-title-main">Fossil fuel</span> Fuel formed over millions of years from dead plants and animals

A fossil fuel is a hydrocarbon-containing material such as coal, oil, and natural gas, formed naturally in the Earth's crust from the remains of dead plants and animals that is extracted and burned as a fuel. Fossil fuels may be burned to provide heat for use directly, to power engines, or to generate electricity. Some fossil fuels are refined into derivatives such as kerosene, gasoline and propane before burning. The origin of fossil fuels is the anaerobic decomposition of buried dead organisms, containing organic molecules created by photosynthesis. The conversion from these materials to high-carbon fossil fuels typically require a geological process of millions of years.

<span class="mw-page-title-main">Developing country</span> Nation with a lower living standard relative to more developed countries

A developing country is a sovereign state with a less developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreement on which countries fit this category. The terms low and middle-income country (LMIC) and newly emerging economy (NEE) are often used interchangeably but refers only to the economy of the countries. The World Bank classifies the world's economies into four groups, based on gross national income per capita: high, upper-middle, lower-middle, and low income countries. Least developed countries, landlocked developing countries and small island developing states are all sub-groupings of developing countries. Countries on the other end of the spectrum are usually referred to as high-income countries or developed countries.

<span class="mw-page-title-main">Carbon tax</span> Tax on carbon emissions

A carbon tax is a tax levied on the carbon emissions from producing goods and services. Carbon taxes are intended to make visible the hidden social costs of carbon emissions. They are designed to reduce greenhouse gas emissions by essentially increasing the price of fossil fuels. This both decreases demand for goods and services that produce high emissions and incentivizes making them less carbon-intensive. When a fossil fuel such as coal, petroleum, or natural gas is burned, most or all of its carbon is converted to CO2. Greenhouse gas emissions cause climate change. This negative externality can be reduced by taxing carbon content at any point in the product cycle.

Energy economics is a broad scientific subject area which includes topics related to supply and use of energy in societies. Considering the cost of energy services and associated value gives economic meaning to the efficiency at which energy can be produced. Energy services can be defined as functions that generate and provide energy to the “desired end services or states”. The efficiency of energy services is dependent on the engineered technology used to produce and supply energy. The goal is to minimise energy input required to produce the energy service, such as lighting (lumens), heating (temperature) and fuel. The main sectors considered in energy economics are transportation and building, although it is relevant to a broad scale of human activities, including households and businesses at a microeconomic level and resource management and environmental impacts at a macroeconomic level.

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The social cost of carbon (SCC) is the marginal cost of the impacts caused by emitting one extra tonne of carbon emissions at any point in time. The purpose of putting a price on a ton of emitted CO2 is to aid policymakers or other legislators in evaluating whether a policy designed to curb climate change is justified. The social cost of carbon is a calculation focused on taking corrective measures on climate change which can be deemed a form of market failure. Latest studies calculate costs of more than US$300 per ton of CO2. The only governments which use the SCC are in North America. Because of politics the SCC is different from a carbon price. The Intergovernmental Panel on Climate Change suggested that a carbon price of $100/tCO2 could reduce global GHG emissions by at least half the 2019 level by 2030.

<span class="mw-page-title-main">Air pollution</span> Presence of dangerous substances in the atmosphere

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References

  1. ↑ Profile of Michael Greenstone on the website of the University of Chicago. Retrieved February 9, 2018.
  2. ↑ Curriculum vitae of Michael Greenstone from the website of the Brookings Institution (dated July 21, 2016). Retrieved February 9, 2018.
  3. ↑ Profile of Michael Greenstone at BFI. Retrieved February 9, 2018.
  4. ↑ Profile of Michael Greenstone at EPIC. Retrieved February 9, 2018.
  5. ↑ Profile of Michael Greenstone at the University of Chicago's Urban Labs. Retrieved February 9, 2018.
  6. ↑ Profile of Michael Greenstone at J-PAL. Retrieved February 9, 2018.
  7. ↑ Profile of Michael Greenstone at IGC. Retrieved February 9, 2018.
  8. ↑ Profile of Michael Greenstone at the E2e Project. Retrieved February 9, 2018.
  9. ↑ List of Fellows of the American Academy of Arts and Sciences in 2017. Retrieved February 10, 2018.]
  10. ↑ Profile of Michael Greenstone at the Brookings Institution. Retrieved February 9, 2018.
  11. ↑ Curriculum vitae of Michael Greenstone from the website of the Brookings Institution (dated July 21, 2016). Retrieved February 9, 2018.
  12. ↑ Editorial Board of the Review of Environmental Economics and Policy. Retrieved February 9, 2018.
  13. ↑ Curriculum vitae of Michael Greenstone from the website of the Brookings Institution (dated July 21, 2016). Retrieved February 9, 2018.
  14. ↑ Curriculum vitae of Michael Greenstone from the website of the Brookings Institution (dated July 21, 2016). Retrieved February 9, 2018.
  15. ↑ Personal website of Katherine Ozment. Retrieved February 9, 2018.
  16. ↑ Curriculum vitae of Michael Greenstone from the website of the Brookings Institution (dated July 21, 2016). Retrieved February 9, 2018.
  17. ↑ Greenstone, M., Jack, B.K. (2015). Envirodevonomics: A Research Agenda for an Emerging Field. Journal of Economic Literature, 53(1), pp. 5-42.
  18. ↑ Ranking of economists on IDEAS/RePEc. Retrieved February 9, 2018.
  19. ↑ Chay, K., Greenstone, M. (2003). The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession. Quarterly Journal of Economics, 118(3), pp. 1121-1167.
  20. ↑ Chay, K.Y., Greenstone, M. (2005). Does Air Quality Matter? Evidence from the Housing Market. Journal of Political Economy, 113(2), pp. 376-424.
  21. ↑ Greenstone, M. (2004). Did the Clean Air Act cause the remarkable decline in sulfur dioxide concentrations? Journal of Environmental Economics and Management, 47(3), pp. 585-611.
  22. ↑ Greenstone, M. (2002). The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures. Journal of Political Economy, 110(6), pp. 1175-1219.
  23. ↑ Deschênes, O., Greenstone, M. (2007). The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather. American Economic Review, 97(1), pp. 354-385.
  24. ↑ Fisher, A.C. et al. (2012). The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather: Comment. American Economic Review, 102(7), pp. 3749-3760.
  25. ↑ Deschênes, O., Greenstone, M. (2012). The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather: Reply. American Economic Review, 102(7), pp. 3761-3773.
  26. ↑ Deschênes, O., Greenstone, M. (2011). Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather in the US. American Economic Journal: Applied Economics, 3(4), pp. 152-185.
  27. ↑ Allcott, H., Greenstone, M. (2012). Is There an Energy Efficiency Gap? Journal of Economic Perspectives, 26(1), pp. 3-28.
  28. ↑ Greenstone, M., Gallagher, J. (2008). Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program. Quarterly Journal of Economics, 123(3), pp. 951-1003.
  29. ↑ Greenstone, M., Gayer, T. (2009). Quasi-experimental and experimental approaches to environmental economics. Journal of Environmental Economics and Management, 57(1), pp. 21-44.
  30. ↑ Greenstone, M., Hornbeck, R., Moretti, E. (2010). Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings. Journal of Political Economy, 118(3), pp. 536-598.
  31. ↑ Ashenfelter, O., Greenstone, M. (2004). Using Mandated Speed Limits to Measure the Value of a Statistical Life. Journal of Political Economy, 112(1), pp. 226-267.
  32. ↑ Greenstone, M., Oyer, P., Vissing-Jorgensen, A. (2006). Mandated Disclosure, Stock Returns, and the 1964 Securities Act Amendments. Quarterly Journal of Economics, 121(2), pp. 399-460.
  33. ↑ "Home". AQLI. Retrieved 2021-12-06.
  34. ↑ "Bio". Michael Greenstone. Retrieved 2021-12-06.
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