Does water scarcity shift the electricity generation mix toward fossil fuels? Empirical evidence from the United States

Jonathan Eyer and Casey Wichman

Journal of Environmental Economics and Management, 2018, vol. 87, issue C, 224-241

Abstract: Water withdrawals for the energy sector are the largest use of fresh water in the United States. Using an econometric model of monthly plant-level electricity generation levels between 2001 and 2012, we estimate the effect of water scarcity on the US electricity fuel mix. We find that hydroelectric generation decreases substantially in response to drought, although this baseline generation is offset primarily by natural gas, depending on the geographic region. We provide empirical evidence that drought can increase emissions of CO2 and local pollutants. We quantify the social costs of water scarcity to be $330,000 per month for each plant that experiences a one-standard deviation increase in water scarcity (2015 dollars), a relationship that persists under future projections of water scarcity.

Keywords: Water scarcity; Electricity generation; CO2 emissions; Air pollution; Climate change (search for similar items in EconPapers)
JEL-codes: D22 L94 Q25 Q41 Q51 Q53 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0095069616305617
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Does water scarcity shift the electricity generation mix toward fossil fuels? Empirical evidence from the United States (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:87:y:2018:i:c:p:224-241

DOI: 10.1016/j.jeem.2017.07.002

Access Statistics for this article

Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

More articles in Journal of Environmental Economics and Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().