| This dissertation analyzes three policies in the field of energy and environmental economics. Chapter 1 examines the impact of market design on efficiency and emissions in the wholesale electricity market. Taking advantage of Texas' transition from a decentralized bilateral trading market to a centralized auction market, I find that information aggregation has a positive effect on market efficiency that dominates any change in market power incentives. Specifically, I show that, in the nine months following the transition, high-cost generators are displaced by low-cost generators in production, leading to a total cost saving of ;Chapter 2 examines the impact of China's fuel sulfur regulation---in particular, the introduction of CHINA III fuel standards---on air quality. Using both a time-series regression discontinuity design and a difference-in-difference method, I find that the implementation of CHINA III gasoline reduces air pollution by 4-7 percent as measured by air pollution index (API). This implies annual health benefits of 3.0 billion dollars, dwarfing the upgrading costs of 28.2 million dollars. By contrast, the introduction of CHINA III diesel standard has only negligible impacts. Further investigation suggests that the diesel standard may not have been complied with due to the inability to pass costs through and the presence of a loophole in the diesel policy.;Chapter 3 is a joint work with Alecia Cassidy that examines the impact of the mandatory pollution liability insurance on firms' environmental compliance performance in Shenzhen, China. The mandatory pollution liability insurance is introduced as a market instrument to mitigate environmental risks. While it protects firms from liability for accidents and hence may cause moral hazard problems, firms are also incentivized to take more precautions regarding their operations and handle hazardous pollutants more properly. We seek to understand which of these effects wins out by examining the change in the number of environmental violations following the introduction of the insurance in Shenzhen. Using a novel dataset on environmental compliance performance and a triple-difference estimation strategy, we find that the number of environmental violations has decreased significantly following the passage of the insurance mandate. |
