EPIC Adds New Faculty Leadership to India and China Efforts
As EPIC expands the breadth and reach of its efforts in India and China, it is adding new leadership to its regional teams. Harris Public Policy Assistant Professor Fiona Burlig is joining EPIC Director Michael Greenstone as the new deputy faculty director of EPIC-India, while Harris Public Policy Assistant Professor Shaoda Wang joins Greenstone as the new deputy faculty director of EPIC-China. The additional leadership will broaden the scope of research and bring additional capacity to build new projects, programming and partnerships on the ground in two countries central to confronting the global energy challenge.
“China and India are two of the world’s most dynamic and rapidly evolving economies, with economic growth raising living standards for many hundreds of millions of people—a massive success story. But both nations are also home to some of the world’s most complex and far-reaching energy and environmental challenges that requires them to balance the need for inexpensive and reliable energy with local environmental challenges and with avoiding disruptive climate change,” says Greenstone, the Milton Friedman Distinguished Service Professor in Economics at the University of Chicago. “Fiona and Shaoda’s exceptional intellectual leadership will heighten our ability to deliver new insights critical to understanding and helping to confront the global energy challenge. Their research in India and China has already produced groundbreaking results, and so we’re thrilled to have them on board in a full leadership capacity to build on their work in new and innovative ways.”
Fiona Burlig studies energy and environmental economics, with a focus on the developing world. Her ongoing research examines the impacts of rural electrification in India and the design of developing-country electricity markets. One recent study explores the impact of rural electrification, finding that electrification does not generate benefits in small villages, but has substantial potential in larger villages across India. Another study explores the continued prevalence of blackouts in developing countries like India, showing that the lack of financial trading in the power market contributes to load shedding. Burlig holds a PhD from the University of California, Berkeley and a BA from Williams College.
“India is at the center of the world’s energy challenges, and its power sector plays a critical role,” says Burlig. “I’m really excited to continue finding ways to improve our understanding of electricity markets in India. EPIC-India already has a fantastic team who have formed the strong partnerships vital for understanding the needs and opportunities on the ground; I am looking forward to bringing more UChicago faculty into the fold to build on this work.”
Shaoda Wang’s research centers on understanding the political economy of public policy, particularly in China. In one study, Wang finds that facing political pressures to improve surface water quality, local officials enforce tighter regulations on polluters the central government can track while shirking on their responsibility to reduce pollution coming from firms not tracked. In another study, he discovers that when citizens use social media to point out pollution violations, it forces accountability and leads to reduced pollution—providing the first experimental evidence on bottom-up participation in environmental governance that is common worldwide. Wang holds a BA from Peking University and a PhD from the University of California, Berkeley.
“After observing firsthand China’s significant pollution problems and the government’s heavy-handed response, I became interested in better understanding how policymakers, industry and citizens interacted and how this interaction influences policy,” says Wang. “I’m looking forward to expanding this research interest, including by fostering new faculty projects with my colleagues at Harris, and working to further collaborations inside China to improve our understanding of energy and environmental policy opportunities in the country.”
EPIC-China’s First Class of Pre-Doctoral Fellows Pursuing Doctoral Degrees
Two of EPIC-China’s first class of pre-doctoral fellows will be taking on new academic challenges this fall. Over the past two years, the fellows have worked closely with EPIC-affiliated faculty and staff to produce valuable research and develop new skills.
The highly competitive fellowship provides young researchers who have completed their bachelor’s degrees the opportunity to gain hands-on experience in a full-time work environment under the guidance of EPIC-affiliated faculty and researchers. This year’s departing class—Bobing Qiu and Fanyu Wang—are moving on to pursue advanced degrees in agricultural & resource economics and sustainable development. Each will leave with the strong support network of professors, postdoctoral scholars, and colleagues who helped advance their research skills, knowledge base and career paths.
Bobing Qiu
Bobing Qiu worked with both EPIC-China Research Director Guojun He and Harris Public Policy Assistant Professor Shaoda Wang on multiple projects related to China’s development, political economy, and environmental issues. Qiu will be joining the PhD program in the Department of Agricultural and Resource Economics at University of California, Berkeley.
“It has been an incredible experience at EPIC-China working on cutting-edge research projects with supportive supervisors and outstanding peers. The technical skills and, more importantly, the research paradigms I developed here are invaluable for my PhD study as well as future career in academic research. I could not wish for a better place to spend the last two years and prepare to pursue a PhD.”
Fanyu Wang
While at EPIC-China, Fanyu Wang worked with both Harris Public Policy’s Shaoda Wang and EPIC-China’s Guojun He. She supported the research project investigating the impact of long-distance transmission on electricity production and the environment in China. In the fall, Fanyu will join the PhD program in Sustainable Development at Columbia University’s School of International and Public Affairs.
“Being an EPIC pre-doctoral fellow has offered me the opportunity to gain hands-on experiences of all stages of research, which is very important for my transition to doctoral study. I feel grateful for the guidance from the faculty, who are very supportive and approachable, and the collaborative working environment among the pre-doctoral fellows has made the experiences all the more valuable.”
Pollution in Beijing is Down by Half Since the Last Olympics, Adding Four Years onto Lives
As the world’s eyes turn to Beijing for the 2022 Winter Olympics, residents and athletes will be breathing easier with air pollution significantly reduced since the last Olympics hosted by the city in 2008, according to a new analysis by the Air Quality Life Index (AQLI). Pollution countrywide has declined by about 40 percent, and by about 50 percent in Beijing thanks to the country’s “war against pollution” since 2013. In most areas of China, pollution has fallen to levels not seen in more than two decades. Because of these reductions in pollution, the average Chinese citizen can expect to live 2 years longer and residents of Beijing can expect to live about 4 years longer, if the reductions are sustained.
“The air people in Beijing breathe today is dramatically cleaner than it was during the last Olympics, allowing residents to live longer, healthier lives,” says Michael Greenstone, the Milton Friedman Distinguished Service Professor in Economics and creator of the AQLI along with colleagues at the Energy Policy Institute at the University of Chicago (EPIC). “The speed of these reductions is without historical precedent globally. At the same time, there are opportunities to further increase lifespans through additional reductions in air pollution.”
To put China’s success into context, the reductions in pollution account for more than three quarters of the global decline since 2013. It took several decades and recessions for the United States to achieve the same pollution reductions that China has accomplished in seven years. But while China has met its national air quality standard, its pollution levels still exceed World Health Organization guidelines. When compared to the most polluted city in the United States, Los Angeles, Beijing is still three times more polluted. If China were to meet the WHO guideline, the average Chinese citizen could expect to gain an additional 2 years of life expectancy, on top of the recent gains. Residents of Beijing could gain an additional 3 years.
“As China enters the next phase of its war against pollution, leaders may find it difficult to continue this swift decline in pollution as it’s possible the country has already captured the low-hanging fruit and done so at a high cost for its residents,” says Ken Lee, the director of the AQLI. “This points to an opportunity to change tactics from the tough, command-and-control policies that have worked over the last several years to lower-cost approaches that better align incentives, market structures and local realities.”
Prior to the 2008 Olympic Games, China took swift, targeted actions to reduce pollution such as temporarily suspending production at many power plants. But the actions managed to only slow the climb in pollution. It wasn’t until the country began enforcing sustained, command-and-control-style rules that pollution levels made a sharp downturn. These approaches—like closing polluting plants, enforcing tighter emissions standards and assigning binding abatement targets to local governments—also came with high costs. For example, at one point, the government left many households without heat during winter after removing coal boilers before natural gas or electric replacements could be installed.
“Leaders have the opportunity to make their progress more durable moving forward through lower-cost, market-based approaches,” says Guojun He, research director at EPIC-China and a professor at the University of Hong Kong. “With the carbon market now implemented, extending such a market to other forms of emissions would make sense and be easy to accomplish. Such approaches have been successful in reducing pollution at a low cost in other parts of the world.”
Shaoda Wang on Environmental Regulations in China
Harris Public Policy Assistant Professor Shaoda Wang takes on important questions on the political economy of China’s public policies, with a specific emphasis on environmental actions. He looks at the enforcement of environmental regulations, their effectiveness and economic costs, as well as how citizen participation impacts pollution enforcement.
BFI and EPIC-China Announce 2021-22 Liang Family Research Fellow
The Energy Policy Institute at the University of Chicago (EPIC) and the Becker Friedman Institute for Economics (BFI) have announced the selection of Kaixin Wang as the 2021-22 Liang Family Research Fellow at BFI. Liang Family Fellows are highly promising, early-career researchers who receive mentorship and training from leading economists working on issues related to economic policy in greater China, with a goal of placing scholars into top PhD programs.
“I am very honored and excited to be selected as this year’s Liang Family Research Fellow,” Wang says. “The fellowship allows me to pursue my interest in environmental economics research with important policy impact under mentorship from Professor Michael Greenstone and other leading researchers. I hope to contribute to projects that will further our understanding of the social impact of environmental issues, especially those related to my home country China.”
Wang graduated from the University of Chicago in the spring of 2021 with a bachelor’s degree in economics and mathematics. His research interests are in micro-econometrics and its application in environmental and energy policy. During his fellowship, Wang will work closely with EPIC-faculty Director Michael Greenstone and other leading researchers at EPIC-China, EPIC’s dedicated center focused on Chinese energy and environmental policy.
The inaugural Liang Family Research Fellow, Shaoda Wang, completed his fellowship in June. In July, he began work as an Assistant Professor at the Harris School of Public Policy – a testament to the quality of the scholarship made possible by this fellowship. At Harris, he will continue his pioneering work on environmental regulations and environmental quality in China.
Professor Michael Greenstone, the Milton Friedman Distinguished Service Professor of Economics, and Director of both BFI and EPIC, credits the Liang fellowship with providing a launchpad for Dr. Wang’s career. “Thanks to James Liang’s visionary gift to BFI and UChicago, we are able to provide an opportunity for promising scholars to work on understanding the economics of energy and the environment in China. This gift is not just providing a flying start to early-career researchers; it is helping to create a new field.”
“The Liang Family Research Fellowship is helping build BFI-China into a destination for top scholars to engage in research on the Chinese economy,” added Zhiguo He, the Fuji Bank and Heller Professor of Finance at Chicago Booth and Director of BFI-China. “We are grateful to the Liang Family for their support.”
EPIC-China is an initiative of BFI-China, which aims to foster and produce cutting-edge economics research, share expertise and insights with Chinese academics and policymakers, and invest in the next generation of researchers on Chinese economic policy. As part of their commitment to advancing frontier research in China, both BFI-China and EPIC-China work closely with premier Chinese research institutions through joint research partnerships. These include the Tsinghua University – University of Chicago Joint Research Center for Economics and Finance and EPIC’s Joint Energy Policy Research Center with the University of the Chinese Academy of Sciences.
Top 10 Charts of 2020
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).
#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.
#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.
#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.
#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.
#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.
#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.
#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.
#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.
#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.
Using Political Incentives to Fight Pollution is Costly and Inefficient, Finds China-Based Study
Many of China’s environmental regulations set targets for local governments that are , used to evaluate the possibility of promotion for local officials. A new study shows that this well-intentioned centralized system of regulating may be ineffective in reaching national goals. The study looked at water quality regulations and found that local officials more heavily enforced regulations on polluting firms that were monitored and tracked by the central government, while not enforcing regulations on firms not tracked. This caused tracked firms to be significantly less productive and firms not tracked to continue to pollute.
“While the policies are well intentioned, leveraging high-powered incentives creates a mismatch in goals that ultimately causes the system to be inefficient,” says study co-author Guojun He, research director at the Energy Policy Institute at the University of Chicago in China (EPIC China) and a professor at the Hong Kong University of Science and Technology. “While local government leaders should be motivated by the altruistic goal of reducing pollution for the good of the people, their goal is instead to get promoted. They work to do so by narrowly regulating firms based only on what the central government can track.”
The water regulations took effect in 2003, when the central government installed several hundred state-controlled 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 had the incentive to enforce tighter regulations on polluters immediately upstream of stations, while shirking on their responsibility to reduce pollution coming from their downstream counterparts.
Guojun He and his co-authors found that local officials more heavily enforced regulations on polluting firms that were monitored, with firms located immediately upstream of a station being 24 percent less productive and emitting 57 percent less pollution than their downstream counterparts. The productivity loss was mainly driven by upstream polluters investing more in abatement equipment to meet tighter regulations. The gap in productivity between upstream and downstream firms did not occur until 2003 when the new targets were announced. In addition, the regulation was concentrated within only a few kilometers upstream of each monitoring station, while farther upstream firms were essentially unaffected since their emissions dilute quickly over space and have little influence on water quality readings.
The unequal deployment of the regulations led to significant economic losses in China. A 10 percent reduction in pollution led to a 3 percent drop in productivity for China’s polluting industries. Taken together, China’s efforts to reduce water pollution led to a total loss in industrial output of more than 800 billion Chinese yuan over the eight years studied (2000-2007).
“By heavily regulating some firms and not regulating others, local leaders have made the needed water quality regulations more expensive to implement, given that firms typically have increasing marginal cost of abatement,” says study co-author Shaoda Wang, a postdoctoral scholar at EPIC and incoming assistant professor at the University of Chicago. “It also creates immense spatial inequalities in regulatory burden and pollution exposure, which could have been avoided in the presence of a more `complete contract’ between the central and local governments.”
Further, the study found that the higher the political incentive to local officials and the more difficult it was for them to manipulate the monitor readings directly, the more significant the gap in productivity between upstream and downstream firms. This further indicates a clear misalignment between the national policy goals and local bureaucratic incentives as local leaders prioritized water quality readings over actual water quality.
China’s Straw Recycling Policy Averts Nearly 19,000 Premature Deaths a Year, Study Finds
In countries that rely heavily on agriculture, straw burning is a popular practice to clear fields and prepare for new crops. But it also contributes to harmful particulate pollution. In Eastern China, for example, straw burning can account for as much as half of the pollution during summer months. While governments have historically had trouble enforcing policies to limit straw burning, a new study in the Journal of Development Economics finds that China’s recent straw recycling subsidy program is leading to less burning, less pollution, and about 18,900 averted premature deaths a year.
“Our research shows that agricultural straw burning leads to more pollution and an increased rate of mortality, especially among those who are rural, poor and elderly,” says Guojun He, research director at the Energy Policy Institute at the University of Chicago in China (EPIC China) and a professor at the Hong Kong University of Science and Technology. “Policies like China’s straw recycling program can be effective in reversing this trend.”
In 2016, the central government began providing farmers and recycling companies subsidies to encourage the recycling of straw in the top ten provinces with the most intensive straw burning—Henan, Anhui, Heilongjiang, Shandong, Jilin, Hebei, Jiangsu, Liaoning, Shanxi and Inner Mongolia. Each province received 100 million Chinese yuan (around 14.2 million USD) in 2016 to recycle straw, and that amount increased to 1.3 billion Chinese yuan in 2017.
In evaluating the subsidy program, Guojun He and his coauthors found that the number of straw fires in subsidized provinces dramatically declined after the policy by 153 a year, relative to the non-subsidized provinces, and this change brought down the annual average particulate pollution level by about 7 percent. As a result of these improvements, about 18,900 premature deaths could have been averted each year in China.
The researchers compared these benefits, which translate to about 55 billion Chinese yuan (around 7.85 billion USD), to the cost of the subsidy, the additional work to enforce the policy and encourage farmers to recycle straw, and the potential changes in agricultural production. Together, they estimate that the costs of the policy would be at most 2.6 billion Chinese yuan each year (around 367.6 million USD)—far below the benefits.
“The data is clear. China’s straw-recycling subsidy significantly reduced straw burning, leading to less pollution and fewer premature deaths,” says He. “Not only was it a policy well worth implementing, but it can serve as a model for other countries wrestling with the problem of straw burning.”
Pollution Plummeted as Coronavirus Lockdowns Stymied Economic Activity
As countries around the world imposed tough restrictions on daily life this Spring to prevent the spread of COVID-19, a new study in Nature Sustainability looks at how air pollution levels were impacted by the subsequent declines in economic activity. The study uses timely and comprehensive air quality data from China. It finds that in the weeks after the Chinese government locked down one third of its cities, particulate pollution (PM2.5) levels dropped by 24 percent countrywide.
“With empty roads and industrial activities largely at a halt, people were consuming less energy, and as a result air pollution levels were significantly lower than before the crisis,” says study co-author Guojun He, the research director for the Energy Policy Institute at the University of Chicago in China (EPIC China) and a professor at the Hong Kong University of Science and Technology. “These plummeting pollution levels can be an early indicator of the deep economic impact of COVID-19.”
He and his co-authors, Yuhang Pan and Takanao Tanaka, also from the Hong Kong University of Science and Technology, compared air quality data in cities where a lockdown was imposed to cities without formal lockdown policies. Those with the lockdown saw their particulate pollution drop 17 percent. To investigate the impact of precautionary measures the government took in other areas not locked down—including extending the Spring Festival holiday, requiring social distancing, and urging people to stay at home—the researchers compared pollution levels in the months and years before COVID-19 hit. They discovered that even the precautionary measures caused pollution to decline by 7 percent. Across the board, lockdowns and precautionary measures led to a 24 percent drop in particulate pollution. The study found the biggest drop in pollution to be in cities with a larger economy, greater industrial activities and traffic, and higher demand for coal heating.
“Even with significant restrictions on daily life and commerce, pollution levels in China were still four times greater than what the World Health Organization considers safe,” He says. “This could be because, while the data confirmed that traffic, industrial, and business activities are important sources of air pollution, so are coal-fired winter heating systems. Those residential heating systems were still, necessarily, powered on during the coronavirus crisis. Moving forward, it will be important for China to develop policy tools that can effectively target these sources without compromising economic activity.”
A Technology Fix That’s Aiding China’s Fight Against Air Pollution
Less than a decade ago, China suffered from a bleak challenge: Not only was air pollution a recognized problem, but many didn’t trust the data being reported by local officials. The central government knew it needed to improve air quality, but that it would be impossible without knowing true pollution levels. The challenge was that local officials often prioritized economic growth and so had strong incentives to manipulate air pollution concentrations before reporting them to the central government.
So, the central government turned to technology. On the heels of declaring a “war on pollution,” the government installed an automatic pollution monitoring system throughout the country that collects pollution data from local stations, releases the data in real-time to the public, and critically is very difficult to tamper with. The move was one of a collection of measures the government took to reduce particulate pollution, which is now down 43 percent from before the war against pollution was declared.
Results from a new study now show that the increased transparency and improved data quality rooted out manipulation and led people to better protect themselves.
“This study demonstrates the critical role greater transparency and improved data quality played in China’s efforts to reduce the harms of air pollution,” says EPIC Director Michael Greenstone, an author of the study and the Milton Friedman Distinguished Service Professor in Economics. “Unpacking what is allowing China to win its war on air pollution is important in its own right but also very useful for other countries considering taking up this challenge against what our Air quality Life Index finds is the greatest current threat to public health on the planet..”
Comparing pollution data from before and after the installation of the technology, Greenstone and his co-authors found that the installation of automatic monitors significantly improved the quality of pollution data being reported. They discovered that reported particulate 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. This suggests air pollution concentrations were being underreported by local government officials. The degree of underreporting was greater in heavily polluted and lower income cities.
When the reliable information on pollution was released, people appeared to respond by taking greater measures to protect themselves. Specifically, online searches for masks—a strong correlator for purchasing behaviors—increased by as much as 300 percent after the monitors were installed, according to the study. Searches for air filters increased by around 20 percent. The implication is that the manipulated data led people to have a false sense of security and insufficiently protect themselves from air pollution’s dangers. This finding underscores the human costs of inaccurate data, as well as the central role that people play in protecting themselves from air pollution.
“While the fight against air pollution continues to be an ongoing priority for the central government, the installation of automatic pollution monitors has played an important role in improving data quality, increasing compliance, and ultimately reducing pollution across the country,” says Guojun He, research director at EPIC China and a professor at the Hong Kong University of Science and Technology. “Along with government actions, an accurate picture of pollution has led more Chinese people to take important steps to protect their own health through the purchase of pollution masks and air filters. Surely, the monitors are a win-win.”
Greenstone and He co-authored the study with Ruixue Jia from the University of California San Diego and Tong Liu from the Hong Kong University of Science and Technology.