COVER STORY: Are Regulations, Incentives & Other Policy Approaches Working?


Lori Bennear explores the use of rigorous quantitative methods to find out.

A state requires manufacturers to identify sources of toxic waste in their facilities, determine ways to reduce them and report the findings. The state doesn’t set limits on toxic discharges, just requires the analysis and planning. Does that really do any good, or is it just so much paperwork?

Lori Bennear, PhD, associate professor of Environmental Economics and Policy and faculty member of the Duke Energy Initiative. Photographed at Gross Hall.

The answer, Lori Bennear found while doing research for her PhD at Harvard, is that yes, simply requiring manufacturers to find problems and develop detailed plans for dealing with them does help.

“My PhD is in public policy, and there’s a focus in the last several decades on public policy analysis to think about measuring causal effects of particular programs on outcomes that we care about.”
–Lori Bennear

“I used data on manufacturing plants in various states, some that had these regulations and some that didn’t, to find out that these programs actually did have a sizable impact on use and release discharges of toxic chemicals,” she says.

Those findings, of course, are important when officials debate whether to keep or begin such programs.

Since coming to the Nicholas School in 2004, Bennear, associate professor of environmental economics and policy, has been researching ways to evaluate environmental policies through the use of rigorous quantitative methods. She uses tools such as statistical analysis to answer questions about the effectiveness of approaches to environmental problems, analyzing costs and benefits. She has evaluated policies in a variety of economic and environmental sectors including fisheries, water quality and energy use.

Lori Bennear, PhD, associate professor of Environmental Economics and Policy, talks with Soli Shin and Jason Lee before their graduate program class on evaluation of environmental policy in Field Auditorium.

She wants to know the facts and figures, and she also wants to know what gets the desired results.

“My PhD is in public policy, and there’s a focus in the last several decades on public policy analysis to think about measuring causal effects of particular programs on outcomes that we care about,” she says.

For example, what if a city gives a rebate to households that install water-saving technology. Does water use go down? How much?

Or, say, the U.S. Environmental Protection Agency issues a regulation limiting the amount of bacteria that can be in drinking water. Does that regulation result in cleaner water, or do water utilities simply figure out different ways of measuring so they don’t have to report violations?

She also has been working with “retrospective regulatory review.”

Fuel oil creates an oil slick that floats on top of ocean waters and contaminates the environment, Global warming and ecology

“At least since the Clinton administration,” Bennear says, “people have been thinking hard about retrospective review, looking back over what we’ve done, getting rid of what’s not working or is redundant, and, in theory, learning more about what is working, and doing more of that.”

All these are the sorts of questions that Bennear grapples with regularly. Are regulations, incentives and other policy approaches working? Do they have unforeseen effects, beneficial or detrimental? Such questions
are of critical importance in the continuing debates about regulations and other approaches to protecting the environment. The answers to them can affect the beliefs and behavior of everyone from families
to multinational corporations. When governments debate regulation or deregulation, when businesses devise strategies, when environmental groups or aid organizations try to help—all can make better decisions if they are dealing with accurate, quantifiable information.

From many viewpoints, those debating policy want to know the costs of adhering to regulations and meeting standards, and whether doing so produces real benefits.

Bennear’s work uses economic analyses to provide answers.

Her interest in such questions goes back at least to her sophomore year at Occidental College in Los Angeles, when she wanted to take an economics elective, and a course in environmental economics was the only one that met her needs.

“I found it fascinating,” she says. “It helped explain a lot of the news events that sort of punctuated my childhood in Wyoming—the let-it-burn policy in Yellowstone, the reintroduction of wolves. These were issues that I sort of followed, but I was in high school. Now, suddenly a lot of this made sense. I was sold.

“We talked about how one of the big controversies with the wolf reintroduction was that wolves might kill cattle. The ranchers were upset. Someone had set up a fund to reimburse ranchers if they could prove a wolf had killed their cattle, and that helped persuade ranchers to accept the reintroduction,” she recalls. “The idea was that if environmentalists and pro-wolf people cared enough, they could make donations to the fund.”

Essentially, she says, “we were thinking about the use of market transactions to try to establish political coalitions in support of a policy. That was sort of how my interest started.”

That was the early 1990s, when the recent fall of the Soviet Union prompted “a lot of discussion about the role of markets in environmental degradation, whether a market-based approach was better than planned, whether market-based failed to protect the environment,” she recalls. Those questions, too, fired her imagination. As a result, Bennear decided to pursue a double major, in environmental studies as well as economics.

Lori Bennear, PhD, associate professor of Environmental Economics and Policy, teaches a graduate program class on evaluation of environmental policy in Field Auditorium.

For her senior thesis, Bennear worked with a fellow student to determine the relationship between the location of hazardous-waste treatment and storage facilities and social justice issues.

Taking advantage of what were  then new research tools, they used  GIS satellite techniques and sophisticated computer programs to obtain hard data rather than relying on anecdotal evidence.

“This was back in the days when the armed forces still scrambled the GIS signals, so we’d stand with a gadget and a big, long pole in the same place on campus every morning to get the coordinates and figure out how they’d scrambled it for the day, and then we’d drive around Los Angeles with this giant yellow satellite receiving pole. I remember standing next to Lockheed Martin and hoping nobody would arrest us,” she says.

Once they had gathered the data and crunched the numbers, Bennear and her classmate, with the help of  a professor, used the statistics to  show that minorities in Los Angeles County were three times more likely than whites to live within a half mile of hazardous waste treatment or dumping sites.

Their findings were reported in the Los Angeles Times.

These days, Bennear is inspiring a new generation to follow in her footsteps by serving as mentor or advisor to Nicholas School students conducting their own independent studies.

A case in point is her work with 2012 Master of Environmental Management graduate Justin Kirkpatrick. (He is now pursuing his PhD at Duke—rather than Harvard—in part, because he thinks Bennear is “amazing to work with.”)

For his master’s project, Kirkpatrick devised a way to determine whether a California program called Property Assessed Clean Energy (PACE) led to an increase in homeowners installing solar panels.

Under PACE, cities could finance new solar panels so homeowners did not have to refinance their mortgage or get conventional loans to cover the costs. The cost of the new panels would, instead, be added to the home’s property value, and repaid as part of property taxes.

In theory, it was a great idea. From an economic standpoint, however, it was not clear that embedding the value of the solar equipment into the value of the property would prompt more people to install residential panels. So, for his master’s project, Kirkpatrick wanted to measure PACE’s impact in cities around the state, including  Palm Desert.

It was easier said than done. Because only certain cities had PACE programs, and because no two cities are exactly alike, creating apples-to-apples comparisons proved difficult. Kirkpatrick couldn’t go back in time, rewrite history, and assess how many solar panels might have been installed in Palm Desert if the PACE program wasn’t offered there.

That’s where creativity—and Bennear’s experience in addressing similar quandaries in her own research—came into play.

“As a professor, Lori taught the tools of what we call ‘causal inference,’” he says. “As an advisor, Lori provided the space necessary to stumble through the use of those tools with patience and expert guidance. It’s like driving for the first time—you inevitably stomp the brakes way too hard, and then slam the gas way too hard. Lori sat back, let me make mistakes, and helped me find my way. Once I had my feet under me, she constantly challenged me, proposing new methods and perspectives.

“She didn’t make it easy in any way, but she made sure I developed research skills rather than just answering the question at hand.”

With her guidance, Kirkpatrick employed a statistical analytic method that allowed him to extrapolate weighted data from cities that didn’t have the PACE program to create a doppelganger “alternative Palm Desert” that looked a lot like the real thing.  He also used the method to simulate two other virtual cities similar to real ones participating in the PACE program.

These apple-to-virtual-apple comparisons allowed him to show that programs such as PACE actually were increasing residential solar use.

“That would have been a really important finding policy-wise, except that it came in the aftermath of the 2008 financial crisis,” Bennear says. “Federal agencies that hold mortgages had stopped buying mortgages with solar assessments attached.”

Spurred by the environmental policy impacts of that financial crisis—along with those of the 2010 Deepwater Horizon oil spill in the Gulf of Mexico and the 2011 tsunami and Fukushima nuclear incident in Japan—Bennear has been working with colleagues at the Rethinking Regulations program at Duke’s Kenan Institute for Ethics to evaluate regulatory response to such catastrophic events.

Her colleagues on the inter-disciplinary team are Edward Balleisen, associate professor of history and vice provost for interdisciplinary studies; Kimberly Krawiec, Katherine Robinson Everett Professor of Law; and Jonathan Wiener, William R. and Thomas L. Perkins Professor of Law and professor
of environmental policy and  public policy.

Pooling their complementary areas of expertise, they have written a book Policy Shock: Recalibrating Risk and Regulation after Oil Spills, Nuclear Accidents and Financial Crises, that will be published by Cambridge University Press this summer.

“It looks both across time and across countries at how different countries respond to the same catastrophes differently,” Bennear says. “The idea is to look for patterns in regulatory responses, and provide some guidance about how to design better regulatory institutions to manage crises.”

Balleisen says Bennear’s analytical approach is invaluable. “Lori Bennear brings the analytical perspective of economics to all manner of pressing regulatory questions—how should we measure regulatory success and failure? How might we design regulatory institutions so that they seek to learn from experience, whether major crises or more gradual transformations?  How can those institutions adapt to quickly changing economic and technological circumstances?” he says.

He also finds her a pleasure to work with. “For all of her disciplinary acumen, Lori’s biggest comparative advantage lies in remarkable openness to collaboration, and her curiosity about the insights of decision-makers and academics from other fields,” Balleisen says.

LINDA C. BRINSON is a freelance editor and writer and an adjunct faculty member at the UNC School of Media  and