Are policymakers accounting for all the benefits of climate policies? No, says one study
Climate policies are typically evaluated based on their domestic benefits. But a new study demonstrates how policies, such as ones that require products to be more fuel efficient, may be quietly improving those products worldwide without receiving any credit for the global emissions reductions as a result.
“When it comes to addressing climate change, many believe only the actions of the greatest emitters really matter,” says study co-author Koichiro Ito, a professor at the University of Chicago Harris School of Public Policy. “But our study shows that products are part of global markets, and the actions of any single country influence emissions coming from many other countries. The multiplying effect can be very significant.”
Ito and his co-authors—James Sallee from the University of California, Berkeley, and Andrew Smith from the University of Wisconsin-Madison—use a fuel efficiency policy in Japan to study this question. Japan’s 2009 fuel-economy subsidy gave consumers a rebate of up to $1,500 when purchasing a car that exceeded the government’s fuel efficiency target. This created a strong incentive for auto companies to improve the fuel efficiency of models sold in Japan. But did those improvements extend to car models sold in the United States?
The study found that in fact it did. It was easier for automakers to sell some of the same cars in Japan and the U.S. As a result, the subsidy in Japan led to a 25 percent improvement in the fuel efficiency of cars sold in Japan, and about an 8 percent improvement in the fuel efficiency of affected cars sold in the U.S., even though American consumers didn’t get the subsidy.
Because the American car market is significantly larger and Americans drive more, the impact of these more efficient cars in the U.S. was much larger than the impact in Japan. The Japanese subsidy reduced carbon by 0.75 megatons per year domestically and by 2.27 megatons per year in the U.S., meaning roughly three-quarters of the policy’s total climate benefit occurred outside Japan’s borders. Put another way, the combined carbon reduction in Japan and the U.S. was four times larger than the carbon reduction in Japan alone.
“Accounting for these types of improvements in products that are sold abroad could fundamentally change how policymakers judge the benefits of climate regulations, as well as other types of regulations impacted by global product markets,” Ito says.
Shaoda Wang Named 2026 Sloan Research Fellow
EPIC Scholar and Harris School of Public Policy Assistant Professor Shaoda Wang was among one of 126 early-career researchers from leading institutions across the United States and Canada—including eight from the University of Chicago—to be named a 2026 Sloan Research Fellow. Awarded annually by the Alfred P. Sloan Foundation, the Sloan Research Fellowship recognizes outstanding early-career researchers whose work demonstrates exceptional creativity and promise. Fellows receive a two-year, $75,000 grant that can be used flexibly to advance their research programs.
Wang’s research spans development economics, environmental economics, and political economy, with a regional focus on China. A notable strand of his work explores the political economy of environmental regulation to understand how incentives faced by officials and citizens influence regulatory enforcement and environmental quality. Wang conducted one study in this area that provided one of the first rigorous estimates of the overall costs of environmental regulation in China.
“I’m deeply honored to receive the Sloan Research Fellowship,” Wang said. “This support will help advance bold questions about how political institutions influence economic and environmental outcomes, and I hope it will inspire more students to engage with open questions in the Chinese political economy. I’m grateful to my colleagues, collaborators, and students at Harris, EPIC, across the University of Chicago, and beyond for their partnership and support of my work.”
In addition to his faculty role, Wang serves as Deputy Faculty Director of the Energy Policy Institute at UChicago’s China team (EPIC China). He is also a Faculty Research Fellow at the National Bureau of Economic Research.
Wang plans to use the grant to further advance his ongoing research agenda on the role of firms in China’s policymaking process, including how they shape environmental regulations and industrial standards—an important black box whose unraveling is essential to deepening our understanding of the country’s political economy.
Wang joined the University of Chicago Harris School of Public Policy after completing his undergraduate studies at Peking University, his doctoral training at UC Berkeley, and a postdoctoral fellowship in UChicago’s Department of Economics and EPIC.
Koichiro Ito Awarded Two Prestigious Prizes for Excellence In Research
Koichiro Ito, a professor at the Harris School of Public Policy, has been awarded two prestigious prizes: the JSPS Prize by the Japan Society for the Promotion of Science as well as the Japan Academy Medal by the Japan Academy.
The recipients of the 21st JSPS prize was announced on December 19, 2024. The prize was established in 2004 to recognize and support young researchers with rich creativity and superlative research ability at an early stage in their careers. Ito was one of twenty-five young scholars across different academic fields who received this prize this year.
The recipients of the 21st Japan Academy Medal were announced on January 14th at the 1185th general meeting of the Japan Academy. The prize was established in 2004 to give formal recognition to outstanding young researchers, while encouraging them in their future work. Ito was one of six honorees, each from different disciplines, recognized for his pioneering economic research on global energy and environmental challenges.
A faculty affiliate of the Energy Policy Institute at the University of Chicago (EPIC), Ito’s research focuses on the intersection of environmental and energy economics, industrial organization, and public economics. He employs randomized field experiments and quasi-experimental designs to address policy-relevant questions in energy and environmental policy. Before joining the University of Chicago, he was a SIEPR Postdoctoral Fellow at Stanford University and an Assistant Professor at Boston University. In 2020, he was also awarded the Ishikawa Prize by the Japanese Economic Association.
How the Killing Off of the Sparrow Incited the World’s Most Deadly Famine
Keystone species like bats and vultures have been found to play an important role in human wellbeing. A new study provides similar evidence of the role of sparrows. The study finds that the sparrows’ collapse helped to incite China’s Great Famine—the world’s most deadly famine, which led to tens of millions of people dying of starvation between 1959 and 1961.
“We’re uncovering the costs of wildlife extinction to our human world one keystone species at a time,” says the study’s co-author Eyal Frank, an assistant professor at the Harris School of Public Policy. “The sparrow is one of those keystone species that play a role in eating insects that eat our crops. They’re incredibly valuable—but, at least in this one episode in history, have been severely undervalued with disastrous consequences.”
The Chinese government targeted the sparrow for eradication in 1958 because they believed the birds were eating crops—though scientists warned the government that the birds also eat crop-eating insects. The government ignored scientific advice and successfully drove sparrows to local extinction within two years. Frank and his co-authors—Shaoda Wang also of UChicago, Qinyun Wang of Fudan University, Xuebin Wang of Shanghai University, and Yang You of the University of Hong Kong—provide the first quantitative evidence to back up long-held beliefs that the sparrows’ collapse played a role in forming the conditions that gave rise to the Great Chinese Famine.
Frank and Wang compared crop productivity and mortality rates in counties that had more sparrows to counties that had less sparrows before and after the birds were targeted. They find that rice and wheat crops—more vulnerable to insects like locusts because they grow above ground—declined by 5 percent and 8 percent, respectively, in counties more impacted by the killing of the sparrows. Meanwhile, sweet potato crops—grown below ground—flourished in more impacted counties because they were less vulnerable to insects likely on the rise in these areas.
“During this time, the government began to require farmers to sell more of their crops because they believed the sparrow eradication had boosted agricultural production,” says Yang You, an assistant professor at the University of Hong Kong’s Business School. “The opposite was true. These counties that were suffering the most severe crop losses, had even less food, and the famine worsened. That could have been avoided if the government had listened to scientists.”
Death rates increased and birth rates decreased in the counties most impacted by the sparrow killings, the study finds. The impacts peaked in 1960, the worst year of the Great Famine. Frank and Wang find that the eradication of the sparrow can account for nearly 20 percent of crop losses during the Great Famine and led to the loss of nearly 2 million lives—about 6 percent of those who died from the famine.
“This study underscores that there is a social cost to species collapse. Even localized losses of key species can have severe consequences for communities—a disruption to food production being one such consequence,” says Shaoda Wang, an assistant professor at the Harris School of Public Policy. “Policies should be informed by scientific insights, strike a balance between our needs and ecosystem protection, and take care not to undermine the role of species in our own lives.”
Koichiro Ito Awarded Prestigious Jiro Enjoji Memorial Prize for Economics
Koichiro Ito, a professor at the Harris School of Public Policy, was awarded the 7th Jiro Enjoji Memorial Prize. The prize, sponsored by The Nikkei and the Japan Center for Economic Research, is given every three years to two outstanding young or mid-career economists for their achievements in economic theory and their promising future in the field. The prize was named after newspaper executive Jiro Enjoji, former president of The Nikkei and the first president of the Japan Center for Economic Research.
Chairman of the Japan Center for Economic Research Kazumasa Iwata, who was a member of the selection committee, said that Ito’s research has been influential in providing economic strategies for tackling energy and environmental issues in the U.S., China, Chile and Japan.
“He is a cutting-edge researcher who has conducted world-class research on environmental policy, energy and electricity policy,” Iwata said of Ito. “Professor Ito is not just a researcher, but is also active in a wide range of fields, and we commend him for this.” Iwata cited Ito’s 2023 field experiment in Yokohama, Japan that studied participation in voluntary dynamic electricity pricing programs. “It is expected that time-varying, dynamic pricing will be introduced in the [Japanese] electricity market,” according to Iwata.
He also cited Ito’s 2022 study on the effects of market integration on renewable energy expansion in Chile. In that study, Ito found that a larger electricity grid increases renewable energy investments and reduces average electricity costs, with added environmental and health benefits.
In addition to his research, Iwata mentioned Ito’s book, “The Power of Data Analysis: How to Approach Causality,” winner of the Nikkei Prize for Best Economics Book in 2017. It is widely used as an introductory book to data analysis and as an undergraduate textbook, according to Iwata.
“I am very honored to receive this prize, which was created after Jiro Enjoji, who was an entrepreneur in Japanese journalism history,” Ito said. “Receiving this prize is really encouraging to let me continue ongoing and future research projects in energy and environmental economics, and I hope my research could be helpful in the design of climate and energy policy.”
Nudging Food Delivery Customers to Skip the Fork Drastically Cuts Plastic Waste, Study Shows
In 2021, more than 400 million metric tons of plastic waste were produced worldwide, and it is predicted that the world’s plastic waste growth will continue to outpace the efforts to reduce plastic pollution in the coming decades. As food delivery services became increasingly popular during the COVID-19 pandemic, the surge in plastic waste generated by single-use cutlery has become a key environmental challenge for many countries. A new study finds “green nudges” that encouraged customers to skip asking for cutlery with their delivery orders were dramatically successful and could be a powerful policy tool to reduce plastic waste.
“Few policies target plastic waste production at the consumer level, except charges on plastic bags,” says EPIC-China’s research director Guojun He, an author of the study and an Associate Professor at the Hong Kong University Business School. “Our findings show that simple nudges can make a big difference in changing consumers’ behaviors and could become a tool for policymakers as they confront the immense challenge of plastic waste.”
Reducing single-use cutlery waste in the food-delivery industry is particularly important in China, the world’s largest producer and consumer of single-use cutlery. As of 2019, more than 540 million Chinese were active users of food-delivery services and each day consumed more than 50 million sets of single-use cutlery that were not adequately treated or disposed of. To reduce single-use cutlery consumption, policy-makers in China set a target of reducing its usage in food deliveries by 30 percent by 2025.
Guojun He and his co-authors Yuhang Pan, Albert Park, Yasuyuki Sawada and Elaine Tan worked with Alibaba’s online food-ordering platform Eleme. Eleme is China’s second largest food-delivery company, similar to Uber Eats and DoorDash, with more than 753 million users in 2022. The researchers evaluated the effectiveness of Alibaba’s green nudges to reduce single-use cutlery consumption. These nudges included changing the default selection to “no cutlery” and including green points as rewards for not using the cutlery. When a customer accumulated enough green points, they could then be redeemed to plant a tree under the customer’s name.
The researchers studied each user’s monthly food-ordering history for two years through 2019-2020 in 10 major Chinese cities. These included the three treated cities with green nudges (i.e., Beijing, Shanghai, and Tianjin) and the seven control cities without the nudges (Qingdao, Xi’an, Guangzhou, Nanjing, Hangzhou, Wuhan, and Chengdu). Among these cities, the authors randomly sampled about 200,000 active users (i.e., those who placed at least one order between 2019 and 2020).
The authors found that the green nudges—changing the default to “no cutlery” and rewarding consumers with green points—increased the share of no-cutlery orders by 648 percent. If green nudges were applied to all of China, they discovered that more than 21.75 billion sets of single-use cutlery would be saved annually—eliminating 3.26 million metric tons of plastic waste and saving 5.44 million trees (from wooden chopsticks) each year.
“Other food delivery platforms, such as UberEats and DoorDash, could try similar nudges to reduce cutlery consumption and plastic waste globally,” says He.
EPIC-China Awards Four Grants to Expand its Scope of Research
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 study “The 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.
China’s Pollution Policies Have Vastly Improved Air Quality, With Benefits Spilling to South Korea
Leaders have long thought that air pollution crossing lines from neighboring countries posed a significant challenge. But how much of a challenge and what to do about it has remained an open question. A new study sheds some light by measuring the toll of transboundary air pollution on people’s health, as well as the important role strong policies can play in improving health outcomes throughout the region.
“Using recent advances in atmospheric science that allowed us to measure the trajectory of fine particulate pollution—the deadliest form of air pollution—we discovered that countries are vastly impacted by the pollution caused by their neighbors,” says Koichiro Ito, an associate professor at the University of Chicago Harris School of Public Policy. “The good news is the benefits of strong policies to reduce pollution also extend to neighboring states. This underscores the importance of treating air pollution as a regional and even global challenge that requires cooperation, and not just a problem to confront at a local level.”
Ito and his co-authors Rao Kotamarthi from the U.S. Department of Energy’s Argonne National Lab, and Seonmin Will Heo, a PhD student at UC Santa Barbara who began work with Ito in 2020 as a Harris Public Policy graduate student, study the case of South Korea. Northwest South Korea experiences strong westerly winds from China during the fall and winter. The researchers found that these winds lead to significantly higher levels of pollution compared to southeast South Korea. The northwest and southeast experience similar pollution levels during the spring and summer—when there is far less westerly wind from China.
This pollution has a direct impact on people’s health in South Korea, leading to a 0.6 percent increase in mortality for every one microgram per cubic meter increase in transboundary particulate matter pollution (PM2.5 ). That translates to an additional 31.2 deaths for every million people annually. The youngest members of society—babies who are a year old or younger—are the most vulnerable, with the mortality rate increasing by 2.1 percent for every one microgram per cubic meter increase in transboundary particulate pollution from China.
Other health indicators also increased during the time studied, 2013 to 2017. The researchers found that a one microgram per cubic meter increase in particulate pollution from China leads to about 18 additional ER visits for every million people a year for asthma and 176 additional ER visits for every million people for rhinitis (nasal inflammation)—a 0.5 percent and 3.4 percent increase, respectively.
“Pollution coming from China makes people in South Korea sicker and die at higher rates—that much is clear,” says Ito. “But China’s immense success in reducing pollution in recent years provided the perfect case study to see that the benefits of pollution policies also travel across boundaries.”
After China began its “war on pollution” in 2014, which came with a series of strong clean air rules, pollution significantly declined nationwide. Ito and his coauthors find that China had a 14.07 microgram per cubic meter drop in particulate pollution and South Korea had a 9.63 microgram per cubic meter drop in transboundary particulate pollution from China from 2015 to 2019. This drop led to fewer deaths from transboundary air pollution—about 300 fewer deaths for every million people a year—which they calculate saved South Korea $2.62 billion per year.
Ito and his coauthors did find evidence that China may have strategically reduced more air pollution in Chinese cities where most air pollution stays inside the country borders and reduced less in cities where most air pollution blows outside of the country. This implies the spillover benefits of clean air rules could be larger for neighboring countries, and therefore, further regional or global cooperation can be valuable to address air pollution.
Ito and Kotamarthi thank the Global Energy Challenge conference sponsored by the Energy Policy Institute at the University of Chicago (EPIC) and the Argonne National Laboratory for seeding their collaboration and work in exploring this topic.
Study Finds Reducing Energy Use Increases Mortality
As the world warms with climate change, a clear dilemma emerges: While communities should reduce the amount of energy they use in order to mitigate emissions, they will also need to adapt to the changing temperatures by using more energy like through air conditioning. What happens when they don’t take steps to adapt? A new study tackles this question using a unique case study.
After the Fukushima nuclear accident in 2011, Japan gradually shut down all of its nuclear power plants, causing a countrywide power shortage. In response, the government launched large-scale energy-saving campaigns to reduce electricity consumption. The government paid particular attention to reducing the usage of air conditioning because it is the largest contributor to residential electricity consumption in Japan. A pair of researchers dug into the impact of these policies.
“Policies to reduce energy use and greenhouse gas emissions are indeed important to our future in order to reduce the severity of climate change,” says co-author Guojun He, the director of research at EPIC-China and an associate professor at the University of Hong Kong. “But climate change is already upon us and encouraging less use of air conditioning or other means of adapting to extreme temperatures can kill people living right now. A better approach when designing climate policies is to speed up the transition to clean energy and encourage people to use more clean energy to protect themselves, rather than limiting individuals’ electricity or energy consumption.”
He and his co-author Takanao Tanaka, a Ph.D. student at the University of California-Berkeley, found that the campaign to save electricity was highly effective. People switched from using air conditioning to electric fans, and electricity consumption was curtailed by about 15% within a short period. The majority of citizens reduced their electricity because of increased information, peer pressure or appeals to their morals, with only 10 to 30 percent reducing electricity because of price increases.
However, as energy use declined, the mortality rate increased. The researchers estimate that each year about 7,710 people died prematurely because of the energy-saving policies. Notably, around 60 percent of the excess deaths occurred during the summer, pointing to the reduction in air conditioning as a main contributing factor to those deaths.
“Policymakers could improve the design of programs meant to mitigate greenhouse gas emissions, as well as increase the use of clean energy in their communities,” says Tanaka from University of California-Berkeley. “Such changes would be especially beneficial to developing countries as they continue to use more energy, and have the resources to adapt, as they grow. These countries are also often the ones most at risk of hot and rising temperatures.”
The research will be in an upcoming edition of the American Economic Journal: Applied Economics.
Social Media Engagement Increases Government Action, Decreases Pollution
When high levels of pollution filled the air and waterways of American communities in the 1960’s, citizens took to the streets and marched for change on the first Earth Day in 1970—leading to major government efforts to control pollution. Today, social media has largely become the gathering place for people throughout the world. But does it effectively lead to change? A new study takes up this question.
The international team of researchers investigated if citizen pressure could improve environmental enforcement and reduce pollution, and if so, what types of citizen pressure—private or public. Exploring this in the context of China, citizen volunteers sent messages appealing for action after an industrial plant violation occurred. Some of the messages were sent privately through a government hotline or online messaging platform, others were sent through the popular Twitter-like Chinese social media site Weibo.
“We found that social media is the new ‘public street,’ galvanizing momentum for change in much the same way as a protest or march, and the more popular the social posts are, the more effective they are in generating action from the government,” says study co-author Michael Greenstone, the Milton Friedman Distinguished Service Professor in Economics and director of the Energy Policy Institute at the University of Chicago (EPIC). “More specifically, it demonstrates that providing the public with information about individual polluter’s emissions can lead to pollution reduction. This has long been hypothesized by proponents of the United States’ Toxics Release Inventory program and other similar programs elsewhere in the world.”
Greenstone and his colleagues found that the public appeals for action delivered through social media reduced violations by more than 60 percent, and decreased air and water pollution by 12.2 percent and 3.7 percent, respectively. Private appeals also led to improvements but by a lesser amount. When the visibility of the social media appeals increased through “likes” and “shares,” creating at least the appearance of growing public support, government regulators were 40 percent more likely to reply and 65 percent more likely to inspect the polluting plants.
“Our study found that social media can be a very effective, and easy, tool to involve citizens in the government process and hold regulators accountable,” says Shaoda Wang, an assistant professor at the Harris School of Public Policy and deputy faculty director for EPIC-China. “The fact that the more popular social posts spurred more action from government officials is not surprising, but does confirm that there is a lot of opportunity for citizens to participate in governance and help improve government accountability.”
The researchers also investigated the indirect impacts of citizen participation in environmental governance. Specifically, they randomized the proportion of firms that are subject to citizen appeals in each prefecture and tracked how non-appealed firms’ environmental performance was affected when a larger share of its prefecture peers received appeals. They found that increasing the amount of citizen appeals in a prefecture does not lead to higher violation rates or emissions from non-appealed firms. The implication is that citizen participation does not crowd- out other local regulatory efforts.
“Previously, this type of bottom-up citizen participation has been shown to be effective in other parts of the world, and especially in contexts where leaders are voted into power as they would feel more accountable to those electing them,” says Guojun He, associate professor in economics and management & strategy at the University of Hong Kong and research director at EPIC-China. “Our study provides the first experimental evidence that this type of citizen engagement can be very effective in a context like China, showing the government does feel a great sense of accountability to its people.”
Along with Greenstone, Wang and He, the study was co-authored by Mark Buntaine from the University of California, Santa Barbara, Mengdi Liu from the University of International Business and Economics, and Bing Zhang from Nanjing University.