Environment, Energy and Climate

How do economic and political incentives affect how humans interact with our natural environment? How can the global electrification be reconciled with climate change goals? And how can some of the most severe damages to our environment - pollution, climate change, and deforestation - be prevented?

Robin Burgess' work attempts to address these questions using novel sources of data, such as remote sensing data, and innovative methods like randomized controlled trias (RCTs). It often centers on the tension between economic growth and the externalities created by human activity.

Recently, Robin Burgess has founded the Economics of Environment and Energy Research Programme at the LSE, serving as a platform to connect young and established researchers in environmental economics and to mainstream issues of environment, energy, and climate within economics and economic policy.

Listen to Robin Burgess discussing his recent research (with Michael Greenstone, Nicholas Ryan, and Anant Sudarshan) in a VoxDev talk with Tim Phillips. The topic of the talk is how treating electricity as a right deteriorates the quality of electricity supply in developing countries.

The Economics of Tropical Deforestation

With Clare Balboni, Aaron Berman and Benjamin A. Olken

Forthcoming, The Annual Review of Economics

PDF Online Appendix

Abstract

Two factors have elevated recent academic and policy interest in tropical deforestation: first, the realization that it is a major contributor to climate change; and second, a revolution in satellite-based measurement that has revealed that it is proceeding at a rapid rate. We begin by reviewing the methodological advances that have enabled measurement of forest loss at a fine spatial resolution across the globe. We then develop a simple benchmark model of deforestation based on classic models of natural resource extraction. Extending this approach to incorporate features that characterize deforestation in developing countries—pressure for land use change, significant local and global externalities, weak property rights, and political economy constraints—provides us with a framework for reviewing the fast-growing empirical literature on the economics of deforestation in the tropics. This combination of theory and empirics provides insights not only into the economic drivers and impacts of tropical deforestation but also into policies that may affect its progression. We conclude by identifying areas where more work is needed in this important body of research. Read more...

The Origins and Control of Forest Fires in the Tropics

With Clare Balboni and Ben Olken

Resubmitted, The Review of Economic Studies

Manuscript Online Appendix

Abstract

Environmental externalities – uncompensated damages imposed on others – lie at the root of climate change, pollution, deforestation and biodiversity loss. Empirical evidence is limited, however, as to how externalities drive private decision making. We study one such behavior, illegal tropical forest fires, using 15 years of daily satellite data covering over 107,000 fires across Indonesia. Weather-induced variation in fire spread risk and variation in who owns surrounding land allow us to identify how far externalities influence the decision to use fire. Relative to when all spread risks are internalized, we find that firms overuse fire when surrounded by unleased government lands where property rights are weak. In contrast, and consistent with Coase, firms treat risks to nearby private concessions similarly to risks to their own land. Government sanctions, concentrated on fires spreading to populated areas, also deter fires, consistent with Pigouvian deterrence. Read more...

Electricity Demand and Supply on the Global Electrification Frontier

With Michael Greenstone, Nicholas Ryan and Anant Sudarshan

Resubmitted, American Economic Review

Draft

Press Coverage: The Economist, IGC Blog, Forbes

Abstract

"Falling off-grid solar prices and grid expansion now give many households in developing countries a choice between electricity sources. We experimentally estimate demand over all sources in Bihar, India and find that: (i) no one source of electricity dominates, as households substitute freely between sources; (ii) both solar and the grid boost electrification rates, but households value the grid more; (iii) as households get wealthier the grid dominates. We apply the demand model to eight African countries to show that the lower surplus from electrification and higher solar take-up in Africa are due to policyinduced differences in supply, not demand." Read more...

Short Video

Full Documentary

The Consequences of Treating Electricity as a Right

With Michael Greenstone, Nicholas Ryan and Anant Sudarshan

In: Journal of Economic Perspectives, 2020, 34(1): 145-169.

Published Version

Press Coverage: IGC Blog

Abstract

This paper seeks to explain why billions of people in developing countries either have no access to electricity or lack a reliable supply. We present evidence that these shortfalls are a consequence of electricity being treated as a right and that this sets off a vicious four-step circle. In step 1, because a social norm has developed that all deserve power independent of payment, subsidies, theft, and nonpayment are widely tolerated. In step 2, electricity distribution companies lose money with each unit of electricity sold and in total lose large sums of money. In step 3, government-owned distribution companies ration supply to limit losses by restricting access and hours of supply. In step 4, power supply is no longer governed by market forces and the link between payment and supply is severed, thus reducing customers' incentives to pay. The equilibrium outcome is uneven and sporadic access that undermines growth. Read more...

Short Video

Full Documentary

The Political Economy of Deforestation in the Tropics

With Matthew Hansen, Ben Olken, Peter Potapov and Stefanie Sieber

In: The Quarterly Journal of Economics, 2012, 127(4): 1707-1754

Published Version Replication Data Online Appendix

Press Coverage: BOS Australia

Abstract

Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions and threatens the world’s most diverse ecosystems. Much of this deforestation is driven by illegal logging. We use novel satellite data that tracks annual deforestation across eight years of Indonesian institutional change to examine how local officials’ incentives affect deforestation. Increases in the number of political jurisdictions lead to increased deforestation and lower timber prices, consistent with Cournot competition between jurisdictions. Illegal logging and local oil and gas rents are short-run substitutes, but this effect disappears over time with political turnover. The results illustrate how local officials’ incentives affect deforestation and show how standard economic theories can explain illegal behavior. Read more...

Working Papers

Electricity Demand and Supply on the Global Electrification Frontier
Robin Burgess, Michael Greenstone, Nicholas Ryan, and Anant Sudarshan
2023, Resubmitted, American Economic Review.
Link to working paper
The Economics of Tropical Deforestation
Clare Balboni, Aaron Berman, Robin Burgess and Benjamin A. Olken
2023, Forthcoming, The Annual Review of Economics.
Link to working paper
National Borders and the Conservation of Nature
Robin Burgess, Francisco JM Costa, and Benjamin A. Olken
2023, Working Paper.
Link to working paper
The Origins and Control of Forest Fires in the Tropics
Clare Balboni, Robin Burgess, and Benjamin A. Olken
2023, Resubmitted, The Review of Economic Studies
Link to working paper
Weather, Climate Change and Death in India
Robin Burgess, Olivier Deschenes, Dave Donaldson, and Michael Greenstone
2017, Working Paper.
Link to working paper

Published Papers

Cycles of Fire? Politics and Forest Burning in Indonesia
Clare Balboni, Robin Burgess, Anton Heil, Jonathan Old and Benjamin A. Olken
2021, In The American Economic Association: Papers and Proceedings.
Link to publication
The Consequences of Treating Electricity as a Right
Robin Burgess, Michael Greenstone, Nicholas Ryan, and Anant Sudarshan
2020, In: Journal of Economic Perspectives, 34 (1): 145–69.
Link to publication
War and deforestation in Sierra Leone
Robin Burgess, Edward Miguel, and Charlotte Stanton
2015, In: Environmental Research Letters, 10 (9): 095014.
Link to publication
The Political Economy of Deforestation in the Tropics
Robin Burgess, Matthew Hansen, Benjamin A. Olken, Peter Potapov, and Stefanie Sieber
2012, In: The Quarterly Journal of Economics, 127 (4): 1707–1754.
Link to publication
Can Openness Mitigate the Effects of Weather Shocks? Evidence from India’s Famine Era
Robin Burgess and Dave Donaldson
2010, In: American Economic Review, 100 (2): 449–453.
Link to publication