The COVID-19 pandemic changed so many aspects of daily life this year, including the way we work. But while we at EPIC may be at home, EPIC scholars are still delivering cutting-edge research breakthroughs: from tracking the coronavirus’ impact on the economy and measuring how climate change will ultimately affect mortality to quantifying the health consequences of—and solutions to—air pollution.

Often times, these insights are best illustrated through data presented in easy-to-digest charts.

So, here are ten of our favorites from 2020.

#1 – Moderately Reducing Global Emissions Cuts the Risk of Dying from Extreme Temps by 84 Percent

The Impact of Climate Change in 2100 is Comparable to Contemporary Leading Causes of Death

 

Source: Valuing the Global Mortality Consequences of Climate Change Accounting for Adaptation Costs and Benefits, NBER Working Paper, August 2020

While the COVID-19 pandemic was the world’s greatest challenge in 2020, this century’s greatest challenge is climate change—projected to be even more threatening than cancer and heart disease in poor hot countries, according to a Climate Impact Lab working paper. With the continued growth of greenhouse gas emissions, the temperature effects of climate change will raise global mortality risk by 85 deaths per 100,000 people by 2100 (RCP8.5). However, bringing global emissions down to moderate levels—not even as low as the Paris Agreement’s long-term targets—would reduce the attendant mortality risk by 84 percent by century’s end (RCP4.5).

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#2 – Air Pollution has Consistently Impacted Global Life Expectancy Over the Course of the Last Two Decades

Global Average Potential Gain in Life Expectancy by Reducing PM2.5 to WHO Guideline, 1998-2008

Source: AQLI Annual Update, July 2020

Air pollution is an everyday killer that has consistently reduced average global life expectancy by about 2 years over the course of the last two decades compared to what it would be if air quality met the World Health Organization (WHO) guideline, according to new data from the Air Quality Life Index (AQLI). In those two decades, improvements in some countries—such as China, which saw a nearly 40 percent drop in pollution in 5 years—were balanced out by worsening conditions in other countries. Pollution increased by 44 percent in South Asia, cutting lives short by 5 years on average in Bangladesh, India, Nepal and Pakistan.

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#3 – Power Demand Provides a Window into Economic Activity as COVID-19 Restrictions Impact Daily Life

Impact of COVID-19 on Electricity Consumption

Source: EPIC COVID-19 Data Tracker

The COVID-19 pandemic caused major disruptions to economic life around the word in 2020 driven by both government restrictions and changes in people’s behavior. But as responses to the pandemic played out in different ways in different regions, the effect of the virus on individual economies also varied widely. In such a crisis, policymakers benefit from up-to-date assessments of economic activity. Yet economic indicators like GDP take months to be released. Recognizing that energy demand often serves as a leading indicator of economic activity, EPIC scholars built a daily electricity demand tracker for countries, regions and cities globally. The tracker provides a simple measure of the pandemic’s localized impact. In New York City, for example, electricity use tumbled 15 to 20 percent below normal during the spring outbreak, suggesting a large economic impact. As conditions improved over the summer, electricity use ticked up—though it has not returned to normal. Miami tells a different story. There, due to a combination of policy and behavioral factors, electricity use has remained at or above average levels throughout the crisis.

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#4 – Americans Working from Home Are Using More Power and Paying Higher Bills

Electricity Consumption by Customer Class

Note: Temperature-adjusted data for consumers in Texas
Source: Powering Work From Home, NBER Working Paper, October 2020

As roughly one-third of Americans work from home because of COVID-19, they’re using about 10 percent more electricity each month, and paying somewhere between $11 and $50 more in their bills, according to a study by EPIC nonresident scholar Steve Cicala. In Texas, the shift has meant households are using 3 to 4 gigawatts of electricity more during work hours—16 percent higher than during normal times. This growth in residential electricity use is masking a continued lag in commercial and industrial consumption, which fell by 12 percent and 14 percent, respectively, from April to July. Even after July 1, a period when most lockdowns had already lifted, commercial and industrial consumption remained 5 percent below normal.

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#5 – The Installation of Automated Pollution Monitors in China Led to More Accurate Readings

Reported PM₁₀ Concentrations Before and After Automation

Source: Can Technology Solve the Principal-Agent Problem? Evidence from China’s War on Air Pollution, BFI Working Paper, June 2020

When the Chinese government sought to reduce pollution about a decade ago, their first challenge was that air quality readings were inaccurate because local officials would manipulate the data before reporting it. The government responded by installing an automatic pollution monitoring system throughout the country that improved data quality, according to a study by EPIC’s Michael Greenstone and EPIC-China’s Guojun He. Reported pollution concentrations increased by 37 percent immediately after the technology was installed, though satellite measurements indicated no change in true air quality before and after the installation. When the reliable information was released, people appeared to respond by taking greater measures to protect themselves as online searches for masks increased by as much as 300 percent.

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#6 – Those Who Pay More for Electricity Don’t Get More of It in Poor, Rural Areas

Hours of Electricity versus Fraction of Revenue Collected for Selected Feeders in Poor, Rural Areas

Source: The Consequences of Treating Electricity as a Right, Journal of Economic Perspectives, Winter 2020

Electric utilities in developing countries often don’t get fully paid by consumers, leading to increasing debt, widespread outages and rationing of power. One reason may be that electricity is often treated as a right, rather than a commodity to be bought and sold. In a study of rural or small-town communities in Bihar, India, EPIC’s Michael Greenstone and Anant Sudarshan found that areas that paid more did not necessarily get more electricity and some of the most reliable supply went to neighborhoods with poor bill payments. Customers on average received about 17 hours of electricity a day, and in many areas less than 20 percent of the cost of power was paid. A combination of efforts to enforce payment, and direct transfers targeted only to the poor to improve their ability to pay, could help in achieving universal access to reliable power.

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#7 – Charging Households for How Much Heat They Use Reduces Energy Use and Improves Air Quality

Effect of Moving from Fixed to Metered Heating Pricing in Tianjin, China

Source: Reforming Inefficient Energy Pricing: Evidence from China, NBER Working Paper, March 2020

How a household is charged for its energy use can have a significant economic and environmental impact, finds Harris Public Policy’s Koichiro Ito. In Tianjin, China, a fixed-priced heating charge was replaced with a metered, use-based system where households paid a reduced fixed charge plus a variable charge based on usage. Four years after the installation of the meters, heating demand was down by about a third, as consumers learned over time when and how much to turn down the thermostat. These improvements in efficiency and reductions in air pollution were worth an additional $61.29 per household per year. Since Tianjin paid a onetime charge of $99.22 per household to install the meters, this investment was recouped in just 18 months.

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#8 – Drilling Increases Before Leases Expire to Maintain Land Rights

Drilling Activity in the Months Around Lease Expiration

Source: The Economics of Time-Limited Development Options: The Case of Oil and Gas Leases, NBER Working Paper, May 2020

In recent years, shale oil and gas industry observers have noticed a trend: Companies are drilling unprofitable wells simply to keep up contracts with landowners. Using data from the Haynesville Shale in northwest Louisiana, Harris Public Policy’s Ryan Kellogg confirms this trend, finding bunching of drilling in the months just prior to lease expiration or a built-in two-year lease extension. He also finds many of the land sections drilled just prior to lease expiration have seen no further drilling. Despite this inefficient bunching, Kellogg shows lease expiration deadlines can create value by counteracting the incentives to delay caused by lease royalties. But for deadlines to be effective, they must apply to all the wells that can be drilled on a particular section, not just the first well.

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#9 – Given the Political Incentive to Reduce Pollution From Monitored Firms, Local Chinese Leaders Imposed Costly Rules

Source: Watering Down Environmental Regulation in China, The Quarterly Journal of Economics, November 2020

To reduce water pollution, the Chinese government installed water monitoring stations, set targets for the stations to meet, and used the water quality readings to help determine the promotion of local government officials. Because water monitoring stations can only capture emissions from upstream, local officials began to enforce tighter regulations on upstream polluters. EPIC-China’s Guojun He and EPIC Postdoctoral Scholar Shaoda Wang found that firms located immediately upstream of a station were 24 percent less productive than their downstream counterparts—driven by the investment in abatement equipment to meet tighter regulations—a change they did not see until 2003. This indicates a misalignment between the national policy goals and local bureaucratic incentives as local leaders prioritized water quality readings over actual water quality.

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#10 – Going Solar Isn’t All About Saving Money for Low-Income Consumers

Profiles of Solar Adopters by Income Group

Source: More Alike than Different: Proles of High-Income and Low-Income Rooftop Solar Adopters in the United States, Energy Research & Social Science, January 2020

Almost half of the United States’ rooftop solar potential lies on low-income homes. In theory, providing low-income households with large financial incentives to adopt solar should lead to adoption by individuals with more diverse motivations and concerns than higher-income households who pay out of pocket and may be drawn to the technology for its environmental benefits. But research from Harris Public Policy’s Kim Wolske finds the profiles of low-income and high-income adopters are more alike than different. Both groups rated saving money as their primary reason for installing solar, followed by a natural intrigue for novel green technologies. More low-income consumers felt a personal obligation to help confront climate change, and also reported being more likely to seek out novel technology. These findings suggest that even when rooftop solar is highly subsidized, program administrators may first need the buy-in of consumers who are already interested in the technology and motivated to use it.

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