From the support for a carbon tax and the benefits of reducing air pollution to the efficiency of renewable portfolio standards, EPIC faculty research has shed new light on some of the most crucial topics in energy this year. Often times, these insights are best illustrated through data presented in easy-to-digest charts.
So, we’ve put together ten of our favorites from 2019.
#1 – Extreme Heat Due to Climate Change Projected to Increase the Death Toll in India by 2100
Full Mortality Risk of Climate Change in 2100
Full mortality risk of climate change in 2100 under a high emissions (RCP 8.5) scenario. Red areas are those with a projected increase in mortality, while blue areas are those with a projected decrease. Averages for each location are shown on the map. Histograms for selected cities show the full distribution of risk for those locations. Source: Climate Change and Heat-Induced Mortality in India, White Paper, October 2019
In 2019, countries around the world experienced yet another year of record hot temperatures. Against this now-familiar backdrop, the Climate Impact Lab and Tata Centre for Development released a report showing that there would be eight times more extremely hot days per year in India in 2100, causing an 11% increase above the current death rates from all causes. Heat-related deaths would be happening as often as deaths from all infectious diseases in India today under this continued high emissions path.
#2 – Renewable Portfolio Standards Reduce Carbon Emissions—But, at a High Cost
Source: Do Renewable Portfolio Standards Deliver? BFI Working Paper, April 2019
How do Renewable Portfolio Standards (RPS) stack up as a climate policy? EPIC Director Michael Greenstone and postdoctoral scholar Ishan Nath compared states with and without RPS policies and found that the programs significantly increased electricity prices, with prices rising by 11 percent seven years after the policy became law and 17 percent twelve years afterwards. And, while the programs do increase renewable generation—and in turn reduce carbon emissions—they do so at a high cost. The RPS states saved up to 175 million tons of carbon emissions seven years afterwards. The cost of reducing those emissions was more than $130 per ton of carbon abated.
#3 – Allotting Oil Drilling Leases Through Auctions Can Increase Industry Output and Landowner Revenue
Gains from Using Auctions Over Private Negotiations
Source: Relinquishing Riches: Auctions vs Informal Negotiations in Texas Oil and Gas Leasing, BFI Working Paper, April 2019
While oil and gas companies have relentlessly improved the efficiency of their wells, an inefficient market for mineral leases—which are concluded in informal and decentralized negotiations rather than centralized auctions—holds back efficiency, according to findings by Thomas Covert, an assistant professor at the Booth School of Business. Covert and his coauthor compared thousands of auctioned and negotiated leases and discovered that auctioned leases do a better job at matching landowners to the most efficient firms. Auctions pay landowners 43 percent more in up front payments. They also produce 58 percent more oil and gas for industry–meaning even more money in the pockets of landowners through higher royalty payments.
#4 – Indians Breathing Most Polluted Air Could Live 3 Years Longer With New Policy
Life Expectancy Gain From Achieving 25% PM2.5 Reduction Target Under NCAP
Source: India’s ‘War Against Pollution’: An Opportunity for Longer Lives, AQLI Report, January 2019
In January 2019, the Indian government announced the National Clean Air Programme (NCAP), which aims to reduce particulate pollution by 20-30 percent from 2017 levels by 2024. Utilizing the Air Quality Life Index (AQLI), which converts particulate pollution into its impact on life expectancy, EPIC researchers explored how much longer people in India would live if pollution were reduced by 25 percent—the midpoint of the NCAP’s goal. The researchers discovered that residents living in India’s most polluted areas could live almost 3 years longer if these reductions were made and sustained. The average Indian could live 1.3 years longer.
#5 – Delays in Banning Wildlife Trade Put Hundreds of Species at Risk
Source: Long Delays In Banning Trade In Threatened Species, Science, February 2019
The large helmeted hornbill bird was commonly found in the wild in 2012. Three years later, it was close to extinction due to overharvesting. Thousands of species face the same risk because of a policy process that responds too slowly to scientific knowledge. Eyal Frank, an assistant professor at Harris Public Policy, analyzed the scientific community’s endangered “Red List” and found trade restrictions are missing for 28 percent of the species. Two-thirds of species wait close to or more than two decades to be protected. Meanwhile, 36 percent of those protected from trade are not classified as needing protection by the scientific community, perhaps because of information gaps and staffing constraints.
#6 – Many Say They Support a Carbon Tax, But Not Many are Willing to See Their Electricity Bills Rise
Source: 2019 EPIC/AP-NORC Public Opinion Poll
In EPIC’s annual public opinion poll with AP-NORC, 67 percent said they would support a carbon tax if the revenue went towards restoring the environment and 59 percent said they would support one if the funding went towards renewable energy R&D. These findings appear to run counter to the conventional wisdom about the most politically appealing version of a carbon tax and to recent efforts by the federal government to step back from environmental protection, with 49 percent and 45 percent, respectively, saying they would support a tax if they received a tax rebate or the revenue would reduce the deficit. At the same time, 43 percent are unwilling to pay anything out of their electricity bill to combat climate change.
#7 – Millions in Developing Countries Lack Access to Electricity. The Reason May be the Belief that Electricity is a Right
Access to Electricity and Transmission and Distribution (T&D) Losses
Each point represents one country and year, for all 142 countries and years from 1990-2014 for which data are available. The local linear regression and histogram of access to electricity are both weighted by country population. T&D losses are defined as the percent of electricity generated by all power sources (in kWh) that is not billed to any consumer. Access data was originally gathered from household surveys and T&D data are originally from national energy agencies.
Source: Electrifying India May Require Convincing People Power Is Something Worth Paying For, Forbes, December 2019
Why do more than 800 million people live without access to reliable energy? EPIC researchers posit that the cause lies in a deep-rooted social norm that electricity is a right and not a private good that must be paid for. As a result, a vicious cycle is created where customers don’t pay, the state limits power, and customers are even less willing to pay for unreliable power. This dynamic shows up in the relationship between global electricity losses and supply data. As the chart shows, as countries connect more and more households to the grid, losses steadily rise. Then, a tipping point occurs after which there is a move towards high-quality supply, universal access and low losses. The challenge before developing countries is to cross over this tipping point.
#8 – With Climate Change, Farmers Dig Deeper For Water
Well Depth in California, 1980-2018
Source: Amid Climate-Linked Drought, Farmers Turn to New Water Sources. Those Are Drying Up Too, Forbes, July 2019
As climate change makes already-warm summers even hotter, farmers are grappling with how to keep their crops healthy. Increasingly, they are turning to irrigation, which could become a problem as their adaptation to heat exacerbates another major consequence of climate change—water scarcity. Using California as a case study, Fiona Burlig, an assistant professor at Harris Public Policy, and her coauthor found that when farmers’ surface water runs out, they are turning to groundwater—digging deeper and deeper wells to get the water they need. As wells become deeper, the price of a gallon of groundwater rises. Because water is an essential input into California crops, these price increases have the potential to raise food prices across the country.
#9 – Evidence is in: Lobbying Crushed Climate Bill’s Hopes
Waxman–Markey Lobbying Spending and Change in Firm Value
Source: The Social Cost of Lobbying Over Climate Policy, Nature Climate Change, May 2019
While economists stand by carbon pricing as the most efficient way to reduce emissions, it has proven to be politically challenging. Yet, a decade ago, the United States nearly passed a cap-and-trade program with Waxman-Markey. Why did it fail? Ashwin Rode, a scientific research director at EPIC and the Climate Impact Lab, measured the effect the bill’s passage would have had on the stock prices of the companies that lobbied for or against it. He discovered that the more firms anticipated to gain or lose, the more they spent, and the firms that stood to lose were more effective. Rode and his co-author calculated that Waxman-Markey had a 55 percent chance of passing in the absence of corporate lobbying. With the lobbying efforts, its chances dropped to 42 percent.
#10 – Do the Rural Poor Want Solar Microgrids? An Experiment Digs In
Demand Curve for Microgrid Solar
The chart shows the share of sample households that paid for the solar microgrid at three different time intervals (represented by the three lines), and their demand for it at three different prices (represented by the dots).
Source: Demand for Electricity in a Poor Economy, Working Paper, August 2019
Rapid innovations that have reduced the price of solar panels have become a promising way of bringing light to the rural poor. But do these households want to buy in? EPIC’s Michael Greenstone and Anant Sudarshan, and their colleagues, studied this question over four years in India’s state of Bihar. Solar microgrids proved relatively unpopular. At unsubsidized prices, demand was nearly zero. Providing a subsidy that cut prices in half increased demand by 17 percent, but over time these customers stopped paying as the microgrids received competition from a growing grid. The authors suggest that decentralized solar does have value, but principally as a fall-back and transition technology, and that home solar systems have significantly greater adoption than microgrids.