Skip to main content



Health shocks and natural resource management: Evidence from Western Kenya

Abstract: Poverty and altered planning horizons brought on by the HIV/AIDS epidemic can change individual discount rates, altering incentives to conserve natural resources. Using longitudinal household survey data from Western Kenya, we estimate the effects of health status on investments in soil quality, as indicated by households’ agricultural land fallowing decisions.


What Determines Gender Inequality in Household Food Security in Kenya? Application of Exogenous Switching Treatment Regression

Abstract: This paper explores the link between the gender of a household head and food security in rural Kenya. The results show that the food security gap between male-headed households (MHHs) and female-headed households (FHHs) is explained by their differences in observable and unobservable characteristics. FHHs’ food security status would have been higher than it is now if the returns (coefficients) on their observed characteristics had been the same as the returns on the MHHs’ characteristics.


Cooperation in teams: The role of identity, punishment, and endowment distribution

Abstract: Common identity and peer punishment have been identified as crucial means to reduce free riding and promote cooperation in teams. This paper examines the relative importance of these two mechanisms under two income distributions in team cooperation. In a repeated public good experiment, we use different combinations of homogeneous/heterogeneous endowments, strong/weak identity, and absence/presence of peer punishment.


State-Dependent Enforcement to Foster the Adoption of New Technologies

Abstract: Harrington (J Public Econ 37: 29-53, 1988) shows that a suitable strategy for regulators to make enforcement more efficient is to target surveillance resources according to past compliance records. Such scheme generates enforcement leverage as non-compliance triggers greater future scrutiny increasing the expected costs of non-compliance beyond the avoidance of immediate fines.


Discounting and relative consumption

We analyze optimal social discount rates when people derive utility from relative consumption, i.e. their own consumption level relative to the consumption level of others. We compare the social, private, and conventional Ramsey rates. Assuming a positive growth rate, we find that (1) the social discount rate exceeds the private discount rate if the importance of relative consumption increases with consumption, and that (2) the social discount rate is lower than the Ramsey rate given quasi-concavity in own and others' consumption and risk aversion with respect to others' consumption.


Thanks but no thanks: A new policy to reduce land conflict

Land conflicts in developing countries are costly both directly and through increased land degradation. An important policy goal is to create respect for borders. This often involves mandatory, expensive interventions. We propose a new policy design, which in theory promotes neighborly relations at low cost. A salient feature is the option to by-pass regulation through consensus. The key idea combines the insight that social preferences transform social dilemmas into coordination problems with the logic of forward induction.


Unintended Effects of Targeting an Environmental Rebate

When designing schemes such as conditional cash transfers or payments for ecosystem services, the choice of whom to select and whom to exclude is critical. We incentivize and measure actual contributions to an environmental public good to ascertain whether being excluded from a rebate can affect contributions and, if so, whether the rationale for exclusion influences such effects. Treatments, i.e., three rules that determine who is selected and excluded, are randomly assigned.


Essays on behavioral economics and policy design

This thesis consists of three self-contained chapters on issues related to spillover effects of behavioral and policy interventions aimed at reducing negative incentives provided by consumption and production subsidies, and discusses the implications for environmental policy design. The first two chapters investigate spillover effects of a behavioral intervention aimed at incentivizing residential water savings in Colombia.


Improving welfare through climate-friendly agriculture: The case of the System of Rice Intensification

We use rich survey data to investigate the economic impact of a climate-friendly rice farming method known as the system of rice intensification (SRI) on the welfare of rain-dependent smallholder farmers in Africa. SRI reduces water consumption by half, which makes it a promising farming system in the adaptation to climate change in moisture-constrained areas, and it does not require flooding of rice fields, resulting in reduced methane emissions.


Economics: Higher costs of climate change

An attempt to reconcile the effects of temperature on economic productivity at the micro and macro levels produces predictions of global economic losses due to climate change that are much higher than previous estimates.


Beyond IPCC, Research for Paris 2015 and Beyond

The Climate conference in ParisDecember 2015 is described as “last chance” or “5 to twelve” but in the climate arena there is a risk that we have over-utilized the doomsday vocabulary already in the run-up to Copenhagen, 2009 the better part of a decade ago. For those who have worked on climate issues for several decades it poses a special challenge to calibrate language.Words like “immediate” need careful explanation.


Push renewables to spur carbon pricing

Make wind and solar power even cheaper by opening up access to the electricity gridand ending fossil-fuel subsidies, urge Gernot Wagner and colleagues. Putting a price on carbon dioxide and other greenhouse gases to curb emissions must be the centrepiece of any comprehensive climate-change policy. We know it works: pricing carbon creates broad incentives to cut emissions. Yet the current price of carbon remains much too low relative to the hidden environmental, health and societal costs of burning a tonne of coal or a barrel of oil. The global average price is below zero, once half a trillion dollars of fossil-fuel subsidies are factored in.


Activity report 2014

The PhD program Global Change and Climate Economics (formerly environmental and climate economics) started in a modest way already in 1991. Since then Sida has supported 30 PhD’s from start to completion of a successful defense and more than 270 students have participated in one or many of our specialization courses. The program constantly evolves and improves based on the experiences of its students, faculty and administrative staff.


Environmental Policy and the Size Distribution of Firms

In this paper we analyze the effects of environmental policies on the size distribution of firms. We model a stationary industry where the observed size distribution is a solution to the profit maximization problem of heterogeneous firms that differ in terms of their energy efficiency. We compare the equilibrium size distribution under emission taxes, uniform emission standards, and performance standards. Our results indicate that, unlike emission taxes and performance standards, emission standards introduce regulatory asymmetries favoring small firms.


On The Strategic Effect of International Permits Trading on Local Pollution: Tha Case of Multiple Pollutants

We introduce a model of strategic environmental policy where two firms compete á la Cournot in a third market under the presence of multiple pollutants. Two types of pollutants are introduced, a local and a transboundary one. The regulator can only control local pollution as transboundary pollution is regulated internationally. The strategic effect present in the original literature is also replicated in this setup.


The Problem of Shared Irresponsibility in International Climate Law

States have treaty-based and customary international law-based responsibilities to ensure that greenhouse gas emissions emanating from their territory do not cause transboundary harm. However, those international legal responsibilities conflict with the observed behavior of states, which suggests a general rule of irresponsible treatment of the global commons.


A balance of bottom-up and top-down in linking climate policie

Top-down climate negotiations embodied by the Kyoto Protocol have all but stalled, chiefly because of disagreements over targets and objections to financial transfers. To avoid those problems, many have shifted their focus to linkage of bottom-up climate policies such as regional carbon markets.


Social preferences are stable over long periods of time

We measure people's pro-social behavior, in terms of voluntary money and labor contributions to an archetypical public good, a bridge, and in terms of voluntary money contributions in a public good game, using the same non-student sample in rural Vietnam at four different points in time from 2005 to 2011.


The value of the Swedish eel fishery

Traditional sectors such as agriculture and fishing often receive special treatment from policymakers because such sectors are perceived to be associated with traditional cultural public good values. However, these values are often difficult to measure and few attempts have been made to do so.


Mission started – but far from accomplished

We live at a unique moment in history when rapid economic growth has finally lifted hundreds of millions out of deep poverty, not only in Asia and Latin America but increasingly in Africa (Sala-i-Martin and Pinkovskiy, 2010). Yet the impending damage of climate change could reverse this.


Why the EU ETS needs reforming: an empirical analysis of the impact on company investments

The European Union's Emissions Trading Scheme (EU ETS) is so far the largest emissions trading system in the world. A rigorous ex post empirical analysis of the scheme is presented. The effect of the scheme on firms' investment decisions in carbon-reducing technologies is analysed by using detailed firm-level data from Swedish industry. Based on difference-in-difference estimation as well as a before–after difference estimation, the results reveal that the EU ETS has not had a significant effect on firms’ decisions to invest in carbon-mitigating technologies. However, although the EU ETS appears to have no direct effect on investments, it is too early to dismiss the system. Consideration is given to how the EU ETS can realize its potential to become an effective tool in the EU climate and energy policy portfolio.


The Environment for Development Initiative: lessons learned in research, academic capacity building and policy intervention to manage resources for sustainable growth

This article reviews the history of the Environment for Development (EfD) initiative, its activities in capacity building and policy-oriented research, and case studies at its centres in Chile, China, Costa Rica, Ethiopia, Kenya, South Africa and Tanzania.


Adoption and disadoption of electric cookstoves in urban Ethiopia: Evidence from panel data

Previous studies on improved cook stove adoption in developing countries use cross-sectional data, which make it difficult to control for unobserved heterogeneity and investigate what happens to adoption over time. We use robust non-linear panel data and hazard models on three rounds of panel data from urban Ethiopia to investigate the determinants of adoption and disadoption of electric cook stoves over time.


Poverty Persistence and Intra-Household Heterogeneity in Occupations: Evidence from Urban Ethiopia

Previous studies of poverty in developing countries have to a great extent focused on the characteristics of the household head and used these as proxies for the underlying ability of the household to generate income. This paper uses five rounds of panel data to investigate the persistence of poverty in urban Ethiopia, with a particular focus on the role of intra-household heterogeneity in occupations.


Atmospheric Pollution in Rapidly Growing Urban Centers: Spatial Policies and Land Use Patterns

We study the optimal and equilibrium distribution of industrial and residential land in a given region. The trade-off between the agglomeration and dispersion forces, in the form of pollution from stationary forces, production externalities, and commuting costs, determines the emergence of industrial and residential clusters across space. In this context, we define two kinds of spatial policies that can be used in order to close the gap between optimal and market allocations.


Crop Insurance as a Strategy for Adapting to Climate Change

Financial insurance for extreme events can play an important role in hedging against the implications of climate change. This paper combines a comprehensive estimation strategy and a unique panel dataset to study the role of financial insurance in farmers' welfare under uncertainty.


Payment Types and Participation in Payment for Ecosystem Services Programs: Stated Preferences of Landowners

Because the effectiveness of payment for ecosystem services (PES) programs depends on landowners’ engagement, understanding the relationship between the type of payment and participation is a key issue. This paper reports on a choice experiment that quantifies landowners’ preferences for cash and educational in-kind payment. The main results indicate a positive correlation between participation in a PES contract and the magnitude of the cash payment, while participation seems uncorrelated with the magnitude of the educational in-kind payment.


Global warming: Improve economic models of climate change

On 31 March, the Intergovernmental Panel on Climate Change (IPCC) released its latest report on the impacts of climate change on humans and ecosystems (see These are real risks that need to be accounted for in planning for adaptation and mitigation. Pricing the risks with integrated models of physics and economics lets their costs be compared to those of limiting climate change or investing in greater resilience.


Positional preferences in time and space: Optimal income taxation with dynamic social comparisons

This paper concerns optimal redistributive non-linear income taxation in an OLG model, where people care about their own consumption relative to (i) other people's current consumption, (ii) own past consumption, and (iii) other people's past consumption. We show that both (i) and (iii) affect the marginal income tax structure whereas (ii) does not. We also derive conditions under which atemporal and intertemporal consumption comparisons give rise to exactly the same tax policy responses.


Explorations in the Environment-Development Dilemma

Although the financial and economic crises have diverted attention from global and local environmental threats and natural resources management issues in developing and developed economies, environment and development concerns must remain on the agendas. The IPCC just released the Working Group I contribution to the IPCC 5th Assessment Report, which will focus World’s attention on topics such as the impact of climate change and the possible mitigation and adaptation options. This report follows the June 2012 United Nations Conference on Sustainable Development held in Rio.


Diffusion of NOx Abatement Technologies in Sweden

This paper studies how different NOx abatement technologies have diffused under the Swedish system of refunded emissions charges and analyzes the determinants of the time to adoption. The policy, under which the charge revenues are refunded back to the regulated firms in proportion to energy output, was explicitly designed to affect investment in NOx reducing technologies.


Optimal Expectations and the Welfare Cost of Climate Variability

Uncertainty about the future is an important determinant of well-being, especially in developing countries where financial markets and other market failures result in ineffective insurance mechanisms. However, separating the effects of future uncertainty from realised events, and then measuring the impact of uncertainty on utility, presents a number of empirical challenges.