The Energy Policy Institute at the University of Chicago (EPIC) is proud to announce six grants to explore critical energy, environment and climate issues in India—a country central to the global energy challenge. The grants will directly support new research on a wide range of issues, from how improved environmental quality impacts learning in schools to how low-income workers make labor supply decisions in anticipation of extreme heat.

The grants are the first to be awarded after EPIC added Harris Public Policy scholar Fiona Burlig to the leadership team in September as a deputy director. The research grants will allow EPIC-India to broaden the scope of its research and further engage the University of Chicago’s leading scholars in solving the vital challenges India faces.

The six research awards will go to:

Amir Jina (Assistant Professor, Harris) and Koichiro Ito (Associate Professor, Harris) to study “Long-run Environmental Quality and Human Capital Formation: Experimental Evidence from Schools in Delhi.”

Health consequences of air pollution are well understood. However, there is relatively little evidence on how the environment affects human capital, and even less that examines this in the long-run. This project will focus on the long-run impact of environmental quality on learning outcomes by randomly assigning environmental improvements to students in Delhi schools. Children spend most of their day in schools (6-8 hours daily) and access to clean air can have long-term positive impact on educational and health outcomes. The researchers will experimentally test the effectiveness of HEPA-grade air filters in classroom of Delhi-NCR, measuring short- and long-run educational outcomes, as well as avoidance or compensatory behavior. By identifying and improving educational outcomes, this project will positively affect the lives of low-income children in the long-run. At the same time, they will provide evidence of a critical missing piece of environmental policy: the first credible evidence of long-run pollution effects.

David Weisbach (Professor, Law), Adam Chilton (Professor, Law), Josh Macey (Assistant Professor, Law), Anup Malani (Professor, Law), and Shubho Roy (JSD, Law) to study “The Effects of India’s System of Electricity Subsidies.”

In many states in India, the current tariffs for electricity are set below supply costs for certain users, with total subsidies in the range of $25 billion in 2019. The costs of subsidies are then recovered by other users paying costs higher than the cost of supplying them electricity. The system, however, creates perverse incentives for utilities. The researchers want to understand the resulting behavior and the distributional effects of this system. They are proposing a pilot study that looks at the tariffs and behaviors in only one city and possibly only one slum within that city. If the pilot is successful, they hope to expand the study to look at additional locations.

Claire Fan (PhD Harris), Sushant Banjara (PhD Harris), Varun Kapoor (PhD Economics), and Yixin Sun (PhD Booth) to study “The Environmental and Human Costs of Sand Mining.”

Economic growth in low and middle-income countries has seen a concomitant boom in construction activities. These activities cause pollution locally, as well as environmental degradation at extraction sites for minerals used in construction. Sand is one such mineral that is mined from riverbeds and beaches, accounting for 85% of global mineral extraction and ranking as the second most used resource after water. In India, sand mining has also been a hotbed for organized crime, giving rise to notorious “sand mafias”. The researchers will generate the first plausibly causal evidence of the environmental effects of sand mining, such as on flooding and groundwater, then explore how these interact with local criminal activity. These impacts may heterogeneously affect different parts of the income distribution as the location choice of mining sites may be contingent on observable demographic factors. They plan to develop a better understanding of these factors.

Varun Kapoor (PhD, Economics) to study “Green menace:  E-rickshaws, congestion and pollution.”

E-rickshaws have proliferated in India over the last 5-10 years. These battery-run 3-wheelers are a pollution-free substitute for auto-rickshaws and have overtaken the last-mile connectivity market. However, these battery-driven rickshaws have limitations – they are slow, and their outer body is fragile, which makes it difficult for them to travel over bumps in the road. These limitations can lead to higher congestion on the road, especially during peak travel times. Higher congestion can be costly in two ways – firstly, it adds to time costs, and secondly, it increases pollution by other vehicles as they stay longer on the road. In this project, the researcher plans to measure these congestion costs in partial equilibrium by changing the supply of e-rickshaws on the road through an incentivized intervention.

Yixin Sun (PhD, Booth) to study “Rubbish Economics: Examining Bengaluru’s Municipal Waste Management.”

Despite being a significant factor in both local environmental quality and global greenhouse gas emissions, the management of solid waste (SWM) is often overlooked by economists. Bengaluru, the third largest city in India, has rapidly urbanized, resulting in dramatic increases to both waste quantities and illegal dumping. With more than 2000 documented illegal dumping sites, waste is an environmental disamenity and a serious health threat. The rapid increase in population has induced rising costs of formal SWM, whereas illegal dumping has remained ever cheap and easy. Waste disposal is an economic decision: agents minimize costs associated with disposal. The researcher proposes tackling this issue with targeted supply- and demand-side interventions designed to bring down the costs of formal SWM such that informal dumping becomes economically unattractive.

Jun Wong (PhD, Economics) to study “Constrained Labor Supply Response to Weather Forecasts.”

As climate changes, households will increasingly need to take up adaptation measures. However, there are equity concerns in adaptation: how much are those who are exposed to the effects of climate change able to adapt? The researcher will attempt to understand how low-income, daily wage workers in India can adapt to extreme heat days given appropriate information. In this context, labor supply decision is a particularly important form of adaptation. They propose a randomized trial to evaluate the labor supply response of daily wage workers to short-term weather forecasts of extreme heat days. The population of daily wage workers will be assigned to two groups: a control group and a treatment group that receives accurate 3-day weather forecasts. This design enables the investigation of how low-income workers make labor supply decisions in anticipation of extreme-heat days.