CDES climate change and sustainability projects

Published in the topmost journal Journal of Environmental Economics and Management.

Researcher

• Professor Asad Islam

Summary

Natural disasters frequently occur across both developed and developing countries. The vast majority of lives that are lost and affected by natural disasters are from poor areas in developing countries. We examine the post-disaster recovery of the households in rural Bangladesh that were affected by Cyclone Aila from 2009 to 2010.

Exploiting exogenous variations in households' exposure to the disaster within the village, we provide empirical evidence of resource sharing within the households' informal network of neighbours and relatives to assist in recovery from the natural disaster.

We find a household's own exposure to the disaster had no significant effect on its investment and income; however, exposure to a household's network had a significant effect on household investment and income two years and six months after the cyclone. We find that informal resource sharing within a household's network crowded out the household's need to purchase formal insurance against disasters.

Published in the top journal Journal of Risk and Uncertainty.

Researcher

• Professor Asad Islam

Summary

Using a unique field experiment in rural Bangladesh, this paper investigates how exposure to a natural disaster affects risk-sharing behavior. We conducted a risk-sharing experiment that randomly assigned different levels of risk-sharing commitments to individuals who were exposed and unexposed to a recent natural disaster and asked them to form risk-sharing groups.

Our results show that disaster-affected individuals are less likely to defect from risk-sharing groups, regardless of the level of ex-ante commitment. Interestingly, individuals from disaster-affected villages chose riskier bets and realized higher average returns compared with individuals from non-disaster-affected areas. Our results have important implications for the design of financial risk-transfer mechanisms in developing countries.

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Working paper available upon request.

Researcher

• Professor Asad Islam

Summary

We examine corruption during a post-cyclone period in Bangladesh. After Cyclone Aila in 2009, the prime minister of Bangladesh announced a special assistance of 20,000 Taka ($300) to rebuild houses of affected households. We estimate the extent of corruption in this disaster relief and examine the factors that might influence the missing funds meant to be distributed to households.

We pay attention to the role of different networks in getting relief grants and associated corruption. Our results indicate missing grant and bribery are considerably less in the post-Aila house building grant- contrary to the general level of the graft in Bangladesh.

Results suggest that individuals’ social (political) networks play an important role in both receiving disaster relief and reporting corruption. Our research has important implications for policymakers and serves as a guide in further efforts to impede corruption in disaster relief.

Received external research grant, with fieldwork/experiment postponed due to COVID-19. 

Researcher

• Professor Asad Islam

Summary

We examine the social and behavioral factors that lead to open dumping of trash and to rigorously test potential solutions to curb this problem that is growing at a dramatic pace across the developing world. The project will commence in three parts employing surveys and a series of low-cost randomized control trials (RCTs) to understand why litter is so prevalent in developing countries and how best to intervene.

Our study will bridge an important gap in our understanding of how cities in developing countries can combat the menace of littering. Our study should provide actionable recommendations as well as a potential path forward for scaling up successful interventions to reduce littering and disseminate our findings to governmental and non-governmental agencies through IGC policy reports and in-country outreach.

Research proposal submitted, exploring funding options.

Researcher

• Professor Asad Islam

Summary

The study will examine how pro-environmental norms and peer comparisons influence household energy consumption. We will conduct randomized controlled trials (RCTs) to understand the effects of three policy instruments to evoke consumers’ environmental concerns, leveraging their prosocial and pro-environmental preferences.

The research is expected to demonstrate whether providing information and feedback on a specific resource-intense behavior can be a powerful tool to achieve energy efficiency. It will shed light not only on the issues of overconsumption of energy as well as the issues of clean energy and climate change mitigation.

It will help governments to manage energy demand and conserve energy while achieving sustainable development goals (SDGs) and meeting the obligation to the United Nations Framework Convention on Climate Change (UNFCCC) in dealing with greenhouse gas emissions mitigation. Moreover, employing prosocial and pro-environmental preferences to reduce electricity use may exert a positive impact on climate change in the long run.

Recently completed project using Randomized Controlled Trials in Bangladesh.

Researcher

• Professor Asad Islam

Summary

This study uses a randomized controlled field experiment to examine the relative effectiveness of energy conservation information in influencing residential energy consumption. The experiment involves 2300 households in three cities in Bangladesh to test three types of energy conservation information: (i) advice on electricity conservation methods; (ii) (average) electricity consumption of others in the city (social comparison); and (iii) own electricity consumption relative to comparable neighbors’ electricity consumption (neighbor comparison).

Our results suggest that providing advice on saving energy could reduce households’ energy consumption significantly. The effects are stronger and significant for advice on electricity conservation compared to neighbor and social comparisons. Our results suggest that the effects of providing own electricity consumption relative to comparable neighbors’ electricity consumption is similar to the effects of giving information about own electricity consumption relative to households’ in the same suburb.

Not surprisingly, the effect is generally stronger for above-average users. The findings indicate that repeated and frequent information could significantly reduce electricity consumption, and that information reduces electricity consumption when feedback is detailed and frequent.

Published in Energy Economics.

Researcher

• Professor Asad Islam

Summary

We collect a household level panel dataset to estimate the price elasticities of electricity demand for different types of urban households in Bangladesh. We use an instrumental variable estimation strategy which exploits exogenous variation in average electricity prices induced by a value-added-tax shock. The results indicate significant heterogeneity in price elasticities by electricity consumption levels. We conduct several simulations under alternative policy scenarios to illustrate how incorporating the heterogeneous nature of price elasticities into pricing policy can help decrease electricity demand-supply mismatch and inequality in electricity consumption. The results have important policy implications for developing countries aiming to address major energy issues by implementing tariff reforms.

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Paper presented at MEEW2021.  

Researcher

• Associate Professor Gaurav Datt

Summary

This research examines the impact of pollution from coal–fired power units on the anemic status of children and women in India. The number of coal units in the district at the time of birth significantly increases the incidence of anemia in young children; in utero exposure and exposure after birth also matters for child anemia.

The number of coal units in the district has effects on anemia among women as well, although the magnitude of the impacts are smaller than in the case of young children. This research finds that impacts are driven by the increase in PM2.5 pollution generated by coal–fired units. Anemia is established as a significant health cost of coal–fired power generation in rapidly growing economies that use this fuel source to meet increasing energy demands.

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Four-part series focusing on climate change and water, air, land and energy, to be published soon.

Researcher

• Associate Professor Gaurav Datt

Summary

India’s environmental challenges are wide-ranging, and they are intensifying over time with both domestic and global implications especially in the context of action on climate change.  This work undertakes a detailed review of the state of India’s environment focusing on issues and challenges in four main areas relating to water, air, land and energy.

Researcher

• Associate Professor Wang-Sheng Lee

Summary

This paper examines the role of a sulphur dioxide (SO2) emissions quota introduced as part of China’s 11th Five-Year Plan on internal movements of high-skilled labour across Chinese prefecture cities. Using data on migration flows calculated through changes in Hukou status, this study suggests that a 10,000 tons increase in the SO2 emissions reduction quota leads on average to approximately a 0.176 percentage points increase in high-skilled net outmigration.

Compared to the largest prefectures, this regulation effect is twice as large in the smaller regulated prefectures. A possible mechanism could be that the implementation of SO2 quotas decreases relative labour demand in polluting industries in the regulated cities in the short term, thereby resulting in sectoral transitions from dirty-to-clean industries as well as skilled net outmigration flows.

However, this net outmigration trend fades in the long term due to stabilisation in air quality. Our findings help contribute to a broader understanding of the effects of environmental policies on internal labour migration and labour force dynamics.

Researcher

• Associate Professor Wang-Sheng Lee

Summary

Following market liberalisation, the vehicle population in China has increased dramatically over the past few decades. This paper examines the causal impact of the opening of a heavily used high-speed rail line connecting two megacities in China in 2015, Chengdu and Chongqing, on air pollution.

We use high-frequency and high spatial resolution data to track pollution along major highways linking the two cities. Our approach involves the use of an augmented regression discontinuity in time approach applied on data that have been through a meteorological normalisation process. This deweathering process involves applying machine-learning techniques to account for meteorological changes in air quality time series data.

Our estimates show that air pollution is reduced by 7.6% along the main affected highway. We simultaneously find increased levels of ozone pollution which is likely due to the reduction in nitrogen dioxide levels that occurred. These findings are supported using a difference-in-difference approach.

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Professor Sisira Jayasuriya initiated a project on climate change and rice yields in India which was side-tracked after CDES got a  grant to undertake the Victorian wheat project. We are planning to revive that project. A draft SSRN paper was done in 2018.

We sought DFAT funds to work on a project focused on small farmers and climate change in Eastern Indonesia/Timor, also involving Prof Glenn Denning (Columbia) and his colleague Prof Shiva Someshwar (Science Po and Columbia). Prof Denning is interested in pursuing the idea.

We are at the initial stages of preparing a collaborative project on strategies for Asian farmers to cope with climate change, exploring options for adaptation and emissions reduction.