Economics of Energy & Environmental Policy
Abstract
This paper gives an overview of the performance of China’s seven regional carbon market pilots and the range of approaches they have used. We assessed the outcomes of these pilots using publicly available secondary market trading data. The differences in market performance are explained by the design of key market elements such as emission allowances, covered sectors, allowance allocation, monitoring, reporting and verification, compliance and penalties, and offset market. The lessons learned from the regional carbon market pilots are used to provide insights that can aid in the design of the upcoming national carbon market.
Abstract
Trees provide large positive externalities within neighborhoods, including noise attenuation, heat alleviation, and air pollutants removal. However, there are remarkable inequalities in tree cover across communities in the US. The wealthier and whiter neighborhoods enjoy more greenery. The disparities in tree exposure can lead to inequalities in heat exposure and health risks. In this paper, we characterize the unequal distribution of trees across neighborhoods in the US and investigate the consequences. We provide evidence that this tree inequality can be attributed to racial discrimination. First, we show that the disparity in tree over today can be traced back to a historic racially discriminatory housing policy. Second, through an audit experiment, we demonstrate that people of color are steered away from places with high tree cover in the initial stage of housing search.
Abstract
In many settings, electricity is subsidized, particularly with subsidies aimed at ensuring the poorest households have access to some low quantity of electricity services. How to deliver such subsidies cost-effectively, particularly in contexts in which utilities also struggle with electricity theft and bill non-payment, is an open question. This proposed project will evaluate a government initiative in Punjab, Pakistan to expand energy access among low-income households that are already grid-connected. Under the “Chief Minister (CM) Punjab Free Solar Panel” scheme, the Punjab Power Development Company Ltd, will provide free rooftop solar panels to 100,000 households that have historically consumed less than 200 kWh of electricity per month. Consumption at or under 200 kWh is low, covering basic needs, and therefore is the current cutoff for the lifeline electricity tariff. This initiative is set against a backdrop of acute energy shortages in Pakistan, soaring grid electricity prices, and the rapid decline in solar photovoltaic costs, which together have catalyzed a broader transition to renewable energy in Pakistan.
Abstract
Increased access to affordable and high-quality electricity services is needed in many low- and middle-income countries. Raising revenue through electrical bill payments can be key to supporting this goal, and help electricity utilities meet increasing electricity demand, while limiting non-technical losses. However, non-payment can result in fewer investments in infrastructure and upgrades, which in turn perpetuates poor service for households. Further, when electricity generation is dominated by fossil fuels, as in Pakistan, greater consumption of electricity services translates into higher carbon emissions. Thus, losses exacerbate the sector’s financial problems and its contributions to climate change. Utilities employ various approaches—technological and institutional innovations—to increase payment for electricity services consumed, yet often it remains low. The research team’s prior work in Karachi, Pakistan indicates that this social norm of not paying for electricity is linked to mistrust in billing practices, information failures, and financial constraints. This suggests a role for complementary interventions to shift norms. In partnership with Karachi Electric, researchers propose a randomized evaluation to test transparency, information, and financial interventions designed to decrease the wedge between consumption and generation. Randomizing interventions at the transformer level will allow the researcher team to estimate tons of CO2 abated.
Abstract
Climate change is increasingly destabilizing rural credit markets by raising default risks for agricultural loans. Extreme weather events – such as heatwaves and heavy rainfall – can significantly reduce farm yields, jeopardizing loan repayment. However, rural banks often overlook climate risks or lack structured approaches to integrate these risks into loan management. This project evaluates information-based interventions to improve risk management by enhancing climate resilience in both agricultural production and rural credit. The researchers are piloting a randomized evaluation with farmers and loan officers in China, testing interventions that address two key challenges: (i) climate risk awareness, providing loan officers and farmers with targeted information on climate risks, forecasts of extreme weather events, resilient farming practices, and agricultural insurance options; and (ii) loan officer accountability, encouraging more systematic follow-ups with farmers post-loan issuance to ensure risk mitigation strategies are implemented. These interventions are delivered through training sessions, digital tools, and structured reporting mechanisms to improve decision-making and risk management. This study will provide practical insights for policymakers and financial institutions on integrating climate risk considerations into rural lending practices. The findings will enhance understanding of how information asymmetries, risk perception, and institutional accountability influence credit market resilience under climate change. Additionally, this study will inform scalable policy solutions that can be adapted to other developing economies with climate-exposed agricultural sectors.
Abstract
TBD