Dec 28, 2021
Exposure to air pollution, a leading contributor to the global burden of disease, can cause economic losses. Driven by clean air policies, the air quality in China, one of the most polluted countries, has improved rapidly since 2013. This has enabled a unique, quasi-experiment to assess the economic impact of air pollution empirically. Using a series of nation-scale longitudinal surveys in 2011, 2013, and 2015, we first examined the questionnaire-based medical expenditure changes before and after the policy intervention for air pollution. Using a state-of-the-art estimator of the historical concentration of particulate matters with diameter less than 2.5 μm (particulate matter (PM)2.5), we further quantified the association between household medical expenditure and PM2.5 using mixed-effect models of the repeated measurements from 26,511 households in 126 cities. Regression models suggest a robust linear association between reduced PM2.5 and saved medical expenditures, since the association did not vary significantly across models with different covariate adjustments, subregions, or subpopulations. Each 10 μg/m3 reduction in PM2.5 was associated with a saving of 251.6 (95% CI: 30.8, 472.3; p-value = 0.026) Yuan in per capita annual medical expenditure. However, due to limitations in data quality (e.g., self-reported expenditures), and imperfect control for unmeasured confounders or impact from concurrent healthcare reform in China, the causality underlying our findings should be further confirmed or refuted. In this study, we observed that compared with the PM2.5 reduction in 2013, the PM2.5 reduction in 2017 was associated with a saving of 552 (95% CI: 68, 1036) Yuan / (person × year), or approximately 736 billion Yuan (equivalent to 111 billion US dollar) per year nationally, which is equivalent to approximately 1% of the national gross domestic product of China.
Dec 27, 2021
From solar lanterns to home systems and minigrids, distributed renewable energy (DRE) has become increasingly competitive as an alternative to grid extension in household electrification across many parts of the emerging world. We explore how DRE use in Indian households has evolved against the backdrop of massive public investment in grid extension. Using two rounds of the 2015–2018 ACCESS household data from six Indian states, we estimate the impact of household electrification via grid extension on DRE ownership and use. We find that demand for solar microgrids and minigrids has all but disappeared, whereas demand for solar home systems and lanterns as backup solutions to intermittent grid electricity supply continues to grow. Most notably, while grid electrification has increased from 66% to 85%, solar lantern ownership has grown from 1.2% to 5%. The use of DRE as a backup solution to government electrification schemes seems driven by changes in quality of electricity supply. These analyses confirm that intermittent grid electricity supply is key to understanding the solar lantern’s continued popularity. The results show that where population density, household income, and government commitment all favor grid extension, the most affordable DRE technologies can still play an important role. These lessons offer insights into the development of solar-based lighting markets in other regions, such as Sub-Saharan Africa, where grid extension continues but grid electricity remains intermittent in supply.
Dec 27, 2021
The reported effects of electrification on rural entrepreneurship are mixed, with recent studies describing heterogeneity in outcomes and methodological challenges in attributing causal effects. Furthermore, the debate largely focuses on performance outcomes, rather than supply- and demand-side barriers to productive electricity use itself. In this paper, we contribute new evidence describing electricity use among micro- and small-enterprises (MSEs) in rural northern India. Puzzlingly, 34% of the 2,004 MSEs surveyed have no grid-connection despite almost complete village grid electrification. We exploit variation in grid supply hours at village level, finding no conclusive link with this and MSE connection likelihoods. Rather, connection likelihood appears to be more closely related to wealth characteristics. Supporting this hypothesis, the reported electricity consumption appears equally unrelated to supply quality and quite low overall: 75% of grid-connected MSEs consume less than 1 kW-hour per day, powering only lighting and fans. These results are notable given the positive bias we expect due to the likely endogeneity between grid supply quality and broader development trends, as noted in recent literature. Our work follows others in arguing that supply side improvements must occur in concert with demand side initiatives to unlock rural MSE electricity consumption. At the same time, the role of off-grid technologies in meeting nascent MSE electricity needs deserves further study.
Dec 27, 2021
As household electrification rates continue to increase globally, the focus in energy access planning is increasingly shifting towards quality of service. To inform this planning, we explore changes in household electricity and people’s use and satisfaction with their service over time in rural India. Fielded in 2015, the ACCESS survey collected data on energy access from more than 8,500 households living across six Indian states. In 2018, the same households were re-surveyed. Using this longitudinal dataset, we sketch the changes in electricity access that took place during these three years. We find that access and the quality of supply have both improved substantially, with a 17 percentage points increase in electrification rates (95% CI: [15,19]). However, a large minority (about one fifth) remains unsatisfied with its electricity access. People’s satisfaction levels were more sensitive to the quality of supply in 2018 compared to 2015. We propose that this change is a result of evolving expectations of electricity services that are offered. As households climb electricity access tiers and acquire more and larger electric appliances (such as fans or TVs), their demands increasingly shift from focusing on the extensive margin of supply to its intensive margin.
Dec 8, 2021
Social science research has often portrayed green industrial policy as a hard test for state capacity. Defined here as state initiatives that allocate public resources to accelerate economic growth through low carbon, structural change in the economy, green industrial policies often mobilize external opposition from incumbent groups whose financial interests are threatened by decarbonization. This article examines potential interest group opposition to green industrial policies through the lens of state investment in the Chinese coal power sector—a key obstacle to China’s 2060 carbon neutrality goal. Using a novel dataset on financial investments in 2675 Chinese coal power plants, the article shows that different levels of government have remarkably similar potential for exposure to stranded assets as a result of green industrial policy. Not only do state actors have controlling stakes in the majority of nominally private coal plants in China, but the majority of such plants have investments from agencies at multiple levels of governments. Our findings suggest that green industrial policies could therefore also face resistance from economic coalitions within the state: both state-owned coal plants and government agencies with substantial investments in such enterprises could object to policies that harm their financial interests. Theoretically, this implies the need for a conceptualization of state capacity that includes the ability to overcome internal opposition to green industrial policy. Empirically, our study highlights a predicament for the Chinese state in climate policy: it has set ambitious goals to decarbonize, but also has a vested interest in ensuring the profitability of the world’s largest coal-fired power generation fleet.
