The Energy Policy Institute at the University of Chicago (EPIC) is proud to announce four grants to explore critical energy, environment and climate issues in China—a country central to the global energy challenge. The grants will directly support new research on a wide range of issues, from the health impacts of transboundary air pollution to incentives to implement local green energy policies.

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

The four research awards will go to:

Koichiro Ito (Associate Professor, Harris) to studyThe Impacts of Transboundary Air Pollution on Morbidity and Healthcare Expenditures.”

Transboundary air pollution has become an important problem in many countries because of growing levels of air pollution across the globe. In a previous project, “International Spillover Effects of Air Pollution: Evidence from Mortality and Health Data” (NBER Working Paper #30830, January 2023, with Seonmin Will Heo and Rao Kotamarthi), the researcher and his colleagues found that transboundary air pollution from China had significant impacts on mortality in South Korea. In this new project, they will investigate how transboundary air pollution from China affects morbidity and healthcare expenditures in South Korea. The South Korean government has recently started to disclose individual-level national health insurance claim data for researchers with a confidential agreement. This dataset includes each individual’s health insurance claim information (diagnosis, treatment, prescription, costs) from 2002 to 2019. They leverage this dataset to ask the long-run impacts of the rapid increases in Chinese air pollution in 2000’s and its remarkable decline in 2010’s on morbidity and healthcare expenditures in South Korea.

Shaoda Wang (Assistant Professor, Harris) to study “Environmental Regulation in Production Networks.”

The researchers will study the impact of environmental regulation on production networks in general equilibrium. They will compile the most comprehensive dataset to date on environmental regulation in China, exploit randomized environmental audits to causally estimate the impact of regulation on firm emissions, and estimate a structural model of firm linkages to simulate alternative forms of regulation and to show how environmental regulation can account for production networks in equilibrium.

Shaoda Wang (Assistant Professor, Harris) to study “Government-led green investment in China.”

Scrutinizing China’s rapid rise in green innovation, a surprising pattern is that, even conditional on local economic conditions, green innovation today is most vibrant in regions with higher pollution levels in the 2000s, suggesting that there might be a “home market” effect in green innovation: regions facing higher pressure for pollution mitigation had stronger incentives to implement local industrial policies supporting green energy, which gave these regions first-mover advantages when national environmental regulations became more stringent later on. In this project, the researchers plan to explore this hypothesis, and investigate the dynamic interactions between centralized regulations and localized industrial policies.

Claire Fan (PhD, Harris), Ashton Pallottini (PhD, Economics), Yuqi Song (PhD, Harris), Yixin Sun (PhD, Booth) to study “Development and conservation: Evidence from desertification in China”

Poverty reduction and preservation of resources are closely linked, yet there is a lack of research on how people and governments make choices that impact both goals at the same time. The researchers will study the co-evolution of poverty alleviation and resource conservation, specifically focusing on land degradation and desertification in China. Although the government has implemented large and costly policies to mitigate and reverse desertification, their long-term effectiveness and costs are highly controversial, and overall welfare impacts remain ambiguous. They will combine administrative and remote-sensed datasets to provide reduced-form evidence of the efficacy of large-scale conservation policies in this setting. These estimates will inform a structural general equilibrium model which analyzes the welfare impacts of place-based policies against other social policies, such as cash transfers or subsidized migration.