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Danae Hernandez-Cortes

Assistant Professor, ASU

Intro

Welcome to my website!

I am an Assistant Professor at ASU, with a shared appointment between the School for the Future of Innovation in Society and the School of Sustainability. My research contributes to the following areas: 1) the distributional consequences of environmental policy, 2) analyzing some of the causes of environmental inequality, and 3) heterogeneous responses to environmental risk. My research uses a combination of causal inference methods and remote sensing/pollution transport models.

How to pronounce my name? Dah-nah-eh.

Research

Working papers

The Effects of Renewable Energy Projects on Employment: Evidence from Brazil

With Sophie Mathes. R&R at JAERE.

Abstract

This paper studies the employment impacts of renewable energy projects in Brazil. Between 2006 and 2017, Brazil's solar capacity grew from 0.001 GW to 1.01 GW, and wind capacity grew from 0.23 GW to 12.4 GW. Using detailed employment information from the universe of formal workers in Brazil, we analyze how the development of renewable energy projects impacts local economies. We find that when new wind energy projects come online, the number of firms in a municipality increases by 14.84 percent and total employment in a municipality increases by 15.95 percent. Employment in occupations related to electricity, construction, and transportation increase by even more. The employment increases appear to stem from growth of existing firms and increased entry of new firms. The findings are mirrored in municipal sales tax revenue and income tax revenue. Our results are not explained by electricity grid expansions or construction of federal roads. Notably, we find larger effects in areas with high shares of informality.

The Distributional Consequences of Incomplete Regulation

R&R at JAERE

Abstract

Environmental policies can be ineffective if firms are able to shift production processes from regulated to unregulated sectors. Such incomplete regulation affects the spatial distribution of pollution and can therefore affect who bears the burden of pollution. I study this phenomenon in the context of a policy intended to reduce pollution from mills that process sugarcane in Mexico. In response to the regulation, I show that mills shifted some processing to the fields where sugarcane is grown. Following the policy, sugarcane fields linked to regulated facilities increased fires by 10% which increased PM2.5 exposure by 6%. Pollution increases were unevenly distributed across communities: agricultural fields tend to be located near poorer populations, and therefore the increase in fires increased their pollution burden. My results highlight a previously undiscussed implication of incomplete pollution regulation: its distributional consequences.

Water, Dust, and Environmental Justice: The Case of Agricultural Water Diversions

With Ryan Abman and Eric Edwards. Conditionally accepted at AJAE.

Abstract

Water diversions for agriculture reduce ecosystem services provided by saline lakes around the world. Exposed lakebed surfaces are major sources of dust emissions and may exacerbate existing environmental inequities. This paper studies the effects of water diversions and their impacts on particulate pollution arising from reduced inflows to the Salton Sea via a spatiallyexplicit particle transport model and changing lakebed exposure. We demonstrate that lakebed dust emissions increased ambient PM10 and PM2.5 concentrations and worsened environmental inequalities, with historically disadvantaged communities receiving a disproportionate increase in pollution. Water diversion decisions are often determined by political processes, and our findings demonstrate the need for analysis of distributional impacts to ensure equitable compensation.

Recent Findings and Methodologies in Economics Research in Environmental Justice

With Lucas Cain, Chris Timmins, and Paige Weber. Accepted REEP.

Abstract

This review synthesizes economics-oriented research in environmental justice with a focus on the last decade. We first categorize this literature into broad areas of inquiry and review main findings. Then, we review recent advances in data and methodologies that have allowed for new study designs and research questions. After identifying breakthroughs, we offer some guidance on how to continue to advance research in this area.

Selected Work in Progress

Vehicles, Travel Demand, and Income: Responses to Subways and Bus Rapid Transit in Mexico City

With Paulina Oliva and Chris Severen.

Migration as Adaptation? U.S. Relocation in Response to Hurricanes

With Margaret Walls and Andrew Royal.

Published work

2023

Do Health Disparities Narrow with Pollution Disparities? Trends from California

Hernandez-Cortes, D. & Meng, K. [Data repository]

AEA Papers and Proceedings, Vol. 113, May 2023
Abstract

Pollution concentrations in the United States have fallen in recent decades. Despite these improvements, disparities in concentrations between racial/ethnic groups persist. We combine administrative data on the universe of emergency room admissions across California with satellite information on PM2.5 concentrations and compare recent trends in racial/ethnic disparities for PM2.5 and asthma rates. We find that PM2.5 concentrations fell for the average Black, Hispanic, and white individual. Similarly, disparities in PM2.5 concentrations fell between Black-white and Hispanic-white individuals. However, racial disparities in asthma rates, as measured by asthma-related ER visits per resident, have increased overall and broadly across the income distribution.

Well setbacks limit California’s oil supply with larger health benefits and employment losses than excise and carbon taxes

Deshmukh, R., Weber, P., Deschenes, O., Hernandez-Cortes, D. , Kordell, T., Mallow, C., Magin, T., Meng, M., Sum, S., Thivierge, V., Uppal, A., Lea, D. & Meng, K.

Nature Energy, May 2023.
Abstract

Compared to excise taxes and carbon taxes, setback restrictions on new oil wells have larger health benefits and worker compensation losses, but are more equitable by bringing greater benefits and lower losses to disadvantaged communities in California. For California to meet green gas emissions (GHG) targets, larger setbacks than currently proposed or additional supply-side policies are needed.

Equitable low-carbon transition pathways for California’s oil extraction

Deshmukh, R., Weber, P., Deschenes, O., Hernandez-Cortes, D. , Kordell, T., Mallow, C., Magin, T., Meng, M., Sum, S., Thivierge, V., Uppal, A., Lea, D. & Meng, K. [Data repository]

Nature Energy, May 2023.
Abstract

Oil supply-side policies—setbacks, excise taxes and carbon taxes—are increasingly considered for decarbonizing the transportation sector. Understanding not only how such policies reduce oil extraction and greenhouse gas (GHG) emissions but also which communities receive the resulting health benefits and labour-market impacts is crucial for designing effective and equitable decarbonization pathways. Here we combine an empirical field-level oil-production model, an air pollution model and an employment model to characterize spatially explicit 2020–2045 decarbonization scenarios from various policies applied to California, a major oil producer with ambitious decarbonization goals. We find setbacks generate the largest avoided mortality benefits from reduced air pollution and the largest lost worker compensation, followed by excise and carbon taxes. Setbacks also yield the highest share of health benefits and the lowest share of lost worker compensation borne by disadvantaged communities. However, currently proposed setbacks may fail to meet California’s GHG targets, requiring either longer setbacks or additional supply-side policies.

Do Environmental Markets Cause Environmental Injustice? Evidence from California's Carbon Market

Hernandez-Cortes, D. & Meng, K. [NBER WP 30198] [Data Repository] Coverage: [NBER Digest, August 2020] [Carbon Tax Center blog] [Grist] [Yes!] [New York Times] [Inside Climate News] [Wall Street Journal] [Response to Pastor et al. (2022)] [Resources Radio podcast]

Journal of Public Economics, Volume 217, January 2023, 104786.
Abstract

Market-based environmental policies are widely adopted on the basis of allocative efficiency. However, there is a growing distributional concern that market forces could increase the pollution exposure gap between disadvantaged and other communities by spatially reallocating pollution. We estimate how this “environmental justice gap" changed following the 2013 introduction of California's carbon market, the world's second largest and the one most subjected to environmental justice critiques. Embedding a pollution transport model within a program evaluation framework, we find that while the EJ gap was widening prior to 2013, it has since fallen by 21-30% across pollutants due to the policy.

2022

Decomposing Trends in U.S. Air Pollution Disparities from Electricity

Hernandez-Cortes, D. , Meng, K. & Weber, P. [NBER WP 30198] [Data repository] Coverage: [NBER Digest]

Environmental and Energy Policy and the Economy 4, 2022.
Abstract

This paper quantifies and decomposes recent trends in U.S. PM2.5 disparities from the electricity sector using a high-resolution pollution transport model. Between 2000- 2018, PM2.5 concentrations from electricity fell by 87% for the average individual, more than double the decline rate in overall U.S. ambient PM2.5 concentrations. Across racial/ethnic groups, we detect a dramatic convergence: since 2000, the Black-White PM2.5 disparity from electricity has narrowed by 94% and the Hispanic-White PM2.5 disparity has narrowed by 92%, though these disparities still exist in 2018. A decomposition exercise reveals nearly all of these disparity trends can be attributed to spatially-varying improvements in emissions intensities, with small contributions from scale, compositional, and residential location changes. This suggests local air pollution policies have played a larger role in reducing U.S. racial/ethnic pollution disparities from electricity than recent coal-to-natural gas fuel switching. While we detect similarly large PM2.5 improvements for the average low and high income individual, PM2.5 differences by income are relatively small and have changed little over time.

The Environmental Justice Dimension of the Mexican Emissions Trading System

Hernandez-Cortes, D. & Lopez-Rosas, E.

Towards an Emissions Trading System in Mexico: Rationale, Design and Connections with the Global Climate Agenda, pp 243-263.
Abstract

Emissions trading systems have the potential of increasing air quality given that GHG emissions are often co-produced with local pollutants such as NOx, SOx, and Particulate Matter (PM). Can emissions trading systems exacerbate or alleviate environmental justice concerns in emerging economies? According to the U.S. Environmental Protection Agency, Environmental Justice is achieved when no group is disproportionately affected by an environmental policy or phenomenon. The main objective of this chapter is to estimate the pollution burden faced by marginalized neighbourhoods in Mexico. This is relevant for Mexico given the beginning of the pilot program of the Mexican Emissions Trading System (ETS) and the country’s history of income inequality and poverty. Using linear regression and two-way fixed effects methods, we found that the highest emitters regulated under the ETS are located near poor populations. We estimated a 5 % CO2 emissions-reduction scenario corresponding to national targets and associated NO2 emissions to that scenario. We find that this scenario is consistent with a decrease in the exposure of NO2 pollution for the most marginalized neighbourhoods. This chapter also discusses other potential sources of environmental injustice that could result after the beginning of the ETS and the potential to address them.

Changes in Weight-Related Outcomes Among Adolescents Following Consumer Price Increases of Taxed Sugar-Sweetened Beverages

Gracner, T., Marquez-Padilla, F. &Hernandez-Cortes, D.

JAMA Pediatrics, 176(2), 150-158
2020

Droughts and rural households’ wellbeing: evidence from Mexico

Arceo-Gomez, E. Hernandez-Cortes, D. & Lopez-Feldman, A. Coverage: [Infobae]

Climatic Change, 162, 1197-1212.
Abstract

Climate change could increase the frequency and duration of droughts that affect Mexico. This is particularly worrisome because many agricultural communities in the country are poor and with limited capacities for adaptation. This study estimated the impact of droughts on rural households’ wellbeing in Mexico, specifically on per-capita earnings, poverty, and children’s school attendance. To do this we focused our empirical analysis on the effects of the 2011 drought; one of the worst droughts that have affected Mexico in the past 70 years. Our results provide clear evidence that droughts have a negative impact on rural households’ wellbeing. Households that experienced a drought had lower per-capita earnings and were almost 5 percentage points more likely to be poor after the drought than their counterparts. Furthermore, droughts reduced male school attendance in almost three percentage points. Our results also provide indirect evidence showing that households that are less familiar with relative water scarcity are the ones that are hit hardest during droughts.

2019

Are land values related to ambient air pollution levels? Hedonic evidence from Mexico City.

Chakraborti, L., Heres, D., & Hernandez Cortes, D.

Environment and Development Economics, 24(3), 252-270.
Abstract

This article investigates whether residents of Mexico City value air quality. Our results suggest that air quality improvement in PM10 is equivalent to a marginal willingness to pay (MWTP) of US$440.31 per property for the period 2006–2013. The corresponding MWTP for PM2.5 is US$880.63, for O3 is US$623.78, and for SO2 is as much as US$2091.50. These estimates are considerably larger in magnitude compared to the few other studies in similar settings. As a percentage of annual household income, these represent 2.44 per cent for PM10, 4.88 per cent for PM2.5, 3.46 per cent for O3 and 11.59 per cent for SO2. Our estimates of land value–pollution elasticities for PM10 (−0.26 and − 0.58) are within range of hedonic estimates for total suspended particulate matter in US cities around the 1970s. The corresponding elasticities range from − 0.55 to − 0.84 for PM2.5, from − 0.06 to − 0.49 for O3 and from − 0.11 to − 0.34 for SO2.

2016

Cambio climático y agricultura: una revisión de la literatura con énfasis en América Latina.

López Feldman, A. J., & Hernández Cortés, D.

El trimestre económico, 83(332), 459-496.
Abstract

The increment in greenhouse gas emissions and its effect on climate is such that the need for the agricultural sector to adapt seems inevitable. However, given that adaptive measures are limited it is possible that climate change will affect food availability and increase price volatility. This essay presents a synthesis of the evidence of the effects that climate change has on the agricultural sector, with a special emphasis on Latin America. This revision makes it clear that the effects are going to be heterogeneous and that they could very well be costly. Therefore, public policies aimed at reducing greenhouse gas emissions while at the same time promoting adaptive measures to climate change, are essential. The essay concludes with some considerations on future research topics that could contribute to the design of said public policies.

Chapters and policy reports

Carbon Neutrality and California’s Transportation Fossil Fuel Supply

With emLab Carbon Neutrality team

Enhancing equity while eliminating emissions in California's supply of transportation fuels

With emLab Carbon Neutrality team

Mexican Rural Households’ Vulnerability and Adaptation to Climate Change

With Alejandro Lopez-Feldman, Antonio Yunez-Naude, Alan Hernandez-Solano, J.E. Edward Taylor

The link between clean air policy and climate change in Mexico: Building an agenda for evaluation and research.

With Paulina Oliva, Marco A. Heredia Fragoso, Victor H. Páramo Figueroa, Teresita Romero Torres, Jose Abraham Ortinez Alvarez, Giovanna Montagner, and Karla J. Lopez Nava

MRV Blueprint for Road Freight Transport NAMA in Mexico

With Georg Schmidt and Miram Frisch

CV


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Teaching

Graduate

Arizona State University

Sustabinable Energy Analytics (Ph.D. course)

About

This course is one of the core courses of the Sustainable Energy Ph.D. in the School of Sustainability. This course introduces energy markets, environmental and energy policy, and environmental justice topics from a quantitative perspective. It also provides an introduction to quantitative methods and causal inference methods in R. Finally, it provides tools for energy and environmental policy analysis.

Blog


Nexos : Los siete retos ambientales de México en 2021

Sandra Aguilar and I wrote this Nexos article to highlight the Environmental Challenges for Mexico during 2021.


Foco Económico : La regulación ambiental incompleta y sus efectos en las localidades vulnerables

Blog in Spanish about my research on incomplete regulation and its environmental justice consequences.


emLab’s Our 2 Cents Blog : Environmental Markets with Justice

Kyle Meng and I wrote this blog to summarize the main findings of our NBER working paper: Do Environmental Markets Cause Environmental Injustice? Evidence from California's Carbon Market


emLab’s Our 2 Cents Blog : Why do we need justice in environmental policy

This blogpost explains why environmental justice is important when analyzing policy and mentions ongoing work with Kyle Meng on the environmental justice consequences of cap and trade in California


Resources for the Future Blog: Recovering from Disasters: Evaluating FEMA’s Housing Assistance Program in the 2017 Hurricane Season

I was an intern in Resources for the Future during the summer of 2018. Margaret Walls and I wrote this blogpost explains the distribution of disaster assistance in the U.S. during the 2017 hurricane season.