Essays in Environmental and Labour Economics

Abstract

Chapter 1 – This paper analyzes the effects of extreme temperature on manufacturing output using a dataset covering the universe of manufacturing establishments in Canada from 2004 to 2012. Extreme temperature can affect manufacturing activity directly through its impact on labour productivity and indirectly through a change in demand for products. Using a panel fixed effects method, our results suggest a non linear relationship between outdoor extreme temperature and manufacturing output. Each day where outdoor mean temperatures are below -18◦C or above 24◦C reduces annual manufacturing output by 0.18% and 0.11%, respectively, relative to a day with mean temperature between 12 to 18◦C. In a typical year, extreme temperatures, as measured by the number of days below -18◦C or above 24◦C, reduce annual manufacturing output by 2.2%, with extreme hot temperatures contributing the most to this impact. Given the predicted change in climate for the mid and end of century, we predict annual manufacturing output losses due to extreme temperature to range between 2.8 to 3.7% in mid-century and 3.7 to 7.2% in end of century. Chapter 2 – In May 2011, the municipality of Slave Lake, Alberta was hit by a devastating wildfire; the second costliest natural disaster in Canada at the time. In this study, we use longitudinal income tax data from 2004-2018, to analyze the short, medium, and long-term effect of this wildfire on incomes, and related outcomes. This paper contributes to the very limited literature examining the economic effects of natural disasters on individuals. It also contributes to the discussion about the cost of natural disasters and highlights an important cost often excluded in published reports of natural disasters. Our results suggest that this event led to a decrease in total income mainly explained by a drop in employment income. Evidence of an intensive margin effect, whereby individuals are more likely to report lower earnings conditional on paid employment, is found. We also find evidence for an extensive margin effect, in which the employment rate falls for individuals over 55 years old. Chapter 3 – How do firms in the manufacturing sector respond to voluntary energy conservation program? Using data covering the universe of manufacturing firms in Canada over the period 2004 to 2012, we estimate the effectiveness of the Canadian Industry Program for Energy Conservation, the flagship federal government energy conservation program targeted at large industrial firms. We use a difference-in-difference approach, coupled with coarsened exact matching, to estimate the effect of this program on firms energy intensity, output, as well as productivity. Our results suggest that the program does not significantly affect the energy intensity of participating firms compared to non-participating firms. We also find no evidence that participant firms perform differently from non-participant firms in term of total productivity or total production. Our study results add to the evidence that voluntary programs play a limited role in transforming energy and environmental outcomes.