Unequal Burden of Industrial Pollution: The Role of Global Value Chains and Trade Competitiveness with William Ridley (UIUC),  Under Review
We study the joint roles of global value chain (GVC) positioning (the "distance" of an industry from its upstream inputs and downstream consumers) and trade competitiveness (the effective prices received by an industry for its exports or paid on its imports in terms of foreign exchange) in determining the intensity of industries' emissions of air pollution. Using data on country-by-industry emissions and GVC positions, we first document that industries' emission intensities are mediated by their distance in the value chain from primary factors versus final consumers, as well as their trade competitiveness. Second, we show that the improved import competitiveness but worsened export competitiveness arising from an appreciation of the domestic currency can lead to declines in emission intensities for industries operating in vertically longer production networks (i.e., value chains with a larger number of industry segments separating primary factors from final consumption). The main insights of our analysis underscore that international trade policies that (i) encourage the consolidation of GVC participants towards "core" positions or (ii) extended GVCs can complement international environmental policy efforts.

New Space Economy with Akhil Rao (Middleburry), Forthcoming,  Oxford Handbook Chapter
Do Competitive Markets Cleanup the US Electricity Sector?: Evidence from the Southwest Power Pool with Daniel Kaffine (CU Boulder), The Energy Journal (2025)
In the US, there has been a movement toward competitive electricity markets with systemoperator auctions. However, the impact of such market reforms on non-market outcomes like emission rates remains unclear. We decompose how competition in wholesale electricity markets can affect carbon emission rates of electricity generating units (EGUs) through process, reallocation, and selection effects. Using event-study and difference-indifference strategies, we quantify the DayAhead Market’s (DAM) environmental impact in the Southwest Power Pool and assess the importance of each channel, with Pennsylvania, New Jersey, and Maryland interconnection serving as the comparison group. We find DAM reduced average carbon emission rates of EGUs by 0.033 tons per MWh, a roughly 4 percent reduction. This reduction is primarily driven by the selection effect: emission-intensive and uneconomical EGUs retire after the DAM market reform. This corresponds to an annual avoidance of 7.66 million tons of carbon dioxide emissions, worth approximately $383.4 million in avoided damages.

Thirsty for Trade: How Globalization Shapes Virtual Water Trade with William Ridley (UIUC),  Environmental and Resource Economics (2025)
We  investigate  the  distributional  implications  of  trade  policy  (import  tariffs)  for  virtual water embodied in traded agricultural products. To do this, we undertake an econometric analysis and counterfactual simulation exercise using a structural gravity framework to quantify  the  impacts  of  (i)  preferential  tariff  schemes  and  (ii)  hypothetical  global  tariff liberalization for virtual water trade in 15 major primary agricultural commodities. We find that tariff preferences have been responsible for increased virtual water exports from developing water-scarce countries predominantly located in Africa and Asia. Conversely, tariff preferences are  responsible  for  higher  levels  of  virtual  water  imports  by  countries in the Americas, Europe, and the Middle East. However, we estimate that further trade liberalization  would  reverse  this  pattern  and  benefit  many  water-scarce  countries  in  the Global South in securing their domestic water resources.

How Do Exchange Rates Affect the Environment? with William Ridley (UIUC),  Canadian Journal of Economics//Revue canadienne d'économique (2025)
Exchange rates are integral to explaining the environmental consequences of globalizationbecause they govern the prices of imported inputs and the price competitiveness of exports and, con-sequently, firms’ input use decisions, production levels and emissions. We study how exchange rates,foreign input sourcing and export orientation determine environmental outcomes across countries andindustries in both theoretical and empirical contexts. For industries that rely intensively on importedintermediate inputs, a stronger domestic currency leads to higher emission intensities (emissions perunit of output), while the reverse holds for industries that export intensively. Our results thus show thatexchange rates have implications for the environment that have heretofore remained unexplored.

Regional Heterogeneity in Environmental Quality: The Role of Firm Production Networks and Trade with Jacob Howard (MITRE) and William Ridley (UIUC),  Journal of the Association of Environmental and Resource Economists (2024)
We study how globalization shapes regional environmental accounts bydeveloping a general equilibrium model capturing the effect of trade liberalizationon the spatial distribution of firms and regional disparities in environmental qualitywithin countries in a setting of multistage firm-to-firm trade. Reductions in tradecosts cause more firms to collocate in regions with better access to foreign markets.Consequently, more pollution is generated in such regions while spatial selection andoutsourcing activities through endogenously established production networks lowerthese regions’ emission intensities. Additionally, we establish that reductions in inter-national trade costs give rise to a positive environmental spatial spillover effect medi-ated through networks, which reduces disparities in emission intensities between re-gions with differential access to foreign markets. Our findings thus highlight the roleof supply networks between firms as a key factor linking globalization and differencesin regional environmental quality.

Harmonizing Welfare and Externalities: Unraveling the Product Versus Process Standards Puzzle in Regulatory Policy with Difei Geng (UARK),  Economics Bulletin (2023)
There are two types of regulatory standards depending on the externalities they are designed to address. One is product standards targeting negative consumption externalities; the other is process standards addressing negative production externalities. Notably, the institutional arrangements for the two types of standards can be different in practice. For instance, the World Trade Organization applies national treatment (NT) to product standards, but its case law favors mutual recognition (MR) for process standards. This paper evaluates the welfare implications of this wellknown product/process distinction regarding regulatory standards. We show that, on welfare grounds, the rule of NT performs relatively better under product standards, while MR is relatively more desirable under process standards. This result provides a welfare-based justification for adopting differential institutional rules on regulatory standards of different nature.

Can the Federal Reserve Save the Environment? with Kyoung-Gon Kim (Dongguk Univ.),  Journal of Cleaner Production (2023)
This study examines the environmental effect of monetary policy, particularly within the framework of global value chains (GVCs). Given the escalating climate concerns and the urgent need for sustainable solutions, it is crucial to investigate the environmental consequences of monetary policy decisions which directly influence domestic production and international input-sourcing activities. As the monetary policy is likely to be associated with a variety of economic factors influencing environmental outcomes, it is critical to introduce an exogenous shock that reflects variations in monetary policies to derive unbiased causal estimates. We thus adopt a proxy-vector autoregression (VAR) approach with U.S. monetary policy surprise as an exogenous instrument. We uncover compelling evidence that one standard deviation of contractionary monetary policy surprise leads to a reduction in overall emissions by approximately 0.5 percent. However, the more significant and concerning result is the observed rise in emission intensities by 0.2 percent. We highlight the key mechanism underlying this outcome: higher domestic credit costs discourage firms from effectively outsourcing production tasks abroad, thereby increasing the generation of air pollutants per unit of output arising from reduced production efficiency. The identification of a previously unrecognized environmental externality calls for a reevaluation of policy approaches and underscores the importance of integrating environmental considerations into monetary policy frameworks.

 US Power Grid and Trade, with Daniel Kaffine and Sergey Nigai (CU Boulder)
 Environmental Regulation and Firm Networks, with Scott Holladay (U of Tennessee), Jay Hyun (U of Alberta) and Gueyon Kim (UCSC) 
 Wildlife Crossings and Accidents, with Hyunseok Jung and Tandem Young (UARK) 
 Inter-regional Electricity Trade and Welfare Gains: Evidence from ERCOT, with Scott Holladay and Connor Neff (U of Tennessee)
 Wildfire Smoke and the US Power Sector, with Daniel Kaffine (CU Boulder)
 Energy Production, Habitat Fragmentation and Roadkill, with Hyunseok Jung (UARK) and Daniel Kaffine (CU Boulder)