Energy and Environmental Economics
A retrospective analysis of program outcomes and lessons learned on implementing first-time wastewater infrastructure in underserved communities in Texas from 1995 through 2017
In Texas, informal settlements called colonias formed from the 1950s to the 1980s without the most basic municipal infrastructure. Federal and Texas agencies authorized about $1 billion for first-time water and wastewater services for about 300,000 residents from 1995 through 2017. The research uses a mix-method approach to assesses at a high level the distribution of funds and outcomes achieved across 31 counties adjacent to the Texas-Mexico border, identifies where needs continue, examines population growth, and compiles programmatic and technical lessons learned. The results show wastewater coverage increased from less than 20% of the colonia population to over 75%. Funds were generally distributed equitably amongst the counties and expected outcomes were achieved. Grant funding was an incentive for cities with more institutional capacity and operational efficiencies to extend service to colonias and provide regional solutions outside city limits. Despite the progress, the most considerable need remains in smaller and more isolated colonias, where overcoming the barriers to service will be costly. Important lessons were learned, such as adopting laws to prevent further proliferation of colonias, the inclusion of household connections within the project ensured customers connected quickly, and regular coordination amongst funding agencies avoided duplication. Unintended consequences included oversized facilities as population growth did not occur as expected. Replacing what is now aging infrastructure requires a strategy and could include a low-cost loan program. Finally, onsite systems are a potential solution for overcoming barriers to service for those isolated colonias.
Leveraging scale economies and policy incentives: Carbon capture, utilization & storage in Gulf clusters
Carbon capture, utilization and storage (CCUS) represents a set of technologies essential to meeting ambitious mid-to late-century decarbonization goals. Yet deployment of CCUS has been slow, with fewer than 20 large-scale facilities operating worldwide in 2019. We estimate the total and marginal cost of constructing and operating new CCUS facilities and associated infrastructure to reduce carbon dioxide (CO2) emissions from current and planned industrial facilities on the Texas and Louisiana Gulf Coast. We compare these cost estimates to scheduled CCUS tax incentives through 2026 under section 45Q of the U.S. Internal Revenue Code to quantify cost-effective emissions abatement. Our analysis measures the cost-reducing potential of economies of scale in regional CO2 pipeline networks. We also compare CCUS costs to one measure of the benefits of carbon capture, the social cost of carbon. Results suggest that U.S. federal tax incentives currently in place through 2026 could justify between 3.3 million and 77.6 million tons of annual CCUS in the Gulf region, depending on the choice of storage technology and the degree of pipeline network coordination. Finally, we highlight several potential policy barriers that may explain low adoption of CCUS in the Gulf Region and elsewhere.
How Well Do U.S. Western Water Markets Convey Economic Information?
An efficient market implies that potential gains from trade are fully captured. Achieving this requires a well-functioning market where prices reflect all available information. In the case of water rights markets, this implies that the permanent water rights transfer price reflects the sum of discounted returns to this asset (i.e., the lease price), the market interest rate, and a risk premium that reflects potential future water scarcity. The purpose of this study is to assess the efficiency of western U.S. water markets by using the asset pricing model to measure how well prices reflect long-run returns to permanent water rights.