Working Paper: NBER ID: w29357
Authors: Yuanning Liang; Ivan J. Rudik; Eric Zou
Abstract: The environmental impacts of economic production extend beyond those directly affecting humans. This paper provides new evidence on the link between production and ecosystem decline using a novel dataset that compiles longitudinal ecological sampling information at tens of thousands of locations across the United States between 1960 and 2015. Local shocks in economic production, such as those driven by national military buildups, led to a significant reduction in species abundance, diversity, and stability, with one-third of the observed effects explained by the causal impact of air pollution. Government environmental regulations significantly mitigated production externalities.
Keywords: economic production; biodiversity; air pollution; environmental regulations
JEL Codes: O44; Q28; Q56
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| local shocks in economic production driven by military buildups (H56) | significant reductions in species abundance, diversity, and stability (Q57) |
| increased production from military spending (H56) | negative impacts on biodiversity outcomes (Q57) |
| air pollution (Q53) | reduced biodiversity outcomes (Q57) |
| environmental regulations (e.g., Clean Air Act) (Q52) | significant improvements in biodiversity outcomes (Q57) |