IDEAS home Printed from https://ideas.repec.org/p/pot/cepadp/78.html
   My bibliography  Save this paper

Energy policies and pollution in two developing country cities: A quantitative model

Author

Listed:
  • Rainald Borck

    (University of Potsdam, CESifo, CEPA)

  • Peter Mulder

    (Netherlands Organization for Applied Scientific Research (TNO), Utrecht University)

Abstract

We study the effect of energy and transport policies on pollution in two developing country cities. We use a quantitative equilibrium model with choice of housing, energy use, residential location, transport mode, and energy technology. Pollution comes from commuting and residential energy use. The model parameters are calibrated to replicate key variables for two developing country cities, Maputo, Mozambique, and Yogyakarta, Indonesia. In the counterfactual simulations, we study how various transport and energy policies affect equilibrium pollution. Policies may be induce rebound effects from increasing residential energy use or switching to high emission modes or locations. In general, these rebound effects tend to be largest for subsidies to public transport or modern residential energy technology.

Suggested Citation

  • Rainald Borck & Peter Mulder, 2024. "Energy policies and pollution in two developing country cities: A quantitative model," CEPA Discussion Papers 78, Center for Economic Policy Analysis.
    • Handle: RePEc:pot:cepadp:78
    DOI: 10.25932/publishup-63847
    as

    Download full text from publisher

    File URL: https://doi.org/10.25932/publishup-63847
    Download Restriction: no
    File URL: https://libkey.io/10.25932/publishup-63847?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stephan Heblich & Stephen J Redding & Daniel M Sturm, 2020. "The Making of the Modern Metropolis: Evidence from London," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 2059-2133.
    2. Lucas W. Davis, 2008. "The Effect of Driving Restrictions on Air Quality in Mexico City," Journal of Political Economy, University of Chicago Press, vol. 116(1), pages 38-81, February.
    3. Anas, Alex, 1990. "Taste heterogeneity and urban spatial structure: The logit model and monocentric theory reconciled," Journal of Urban Economics, Elsevier, vol. 28(3), pages 318-335, November.
    4. Stephen J. Redding & Esteban Rossi-Hansberg, 2017. "Quantitative Spatial Economics," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 21-58, September.
    5. Tao Lin & Yunjun Yu & Xuemei Bai & Ling Feng & Jin Wang, 2013. "Greenhouse Gas Emissions Accounting of Urban Residential Consumption: A Household Survey Based Approach," PLOS ONE, Public Library of Science, vol. 8(2), pages 1-12, February.
    6. Stefan Bauernschuster & Timo Hener & Helmut Rainer, 2017. "When Labor Disputes Bring Cities to a Standstill: The Impact of Public Transit Strikes on Traffic, Accidents, Air Pollution, and Health," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 1-37, February.
    7. Larson, William & Liu, Feng & Yezer, Anthony, 2012. "Energy footprint of the city: Effects of urban land use and transportation policies," Journal of Urban Economics, Elsevier, vol. 72(2), pages 147-159.
    8. Kenneth A. Small, 1980. "Energy Scarcity and Urban Development Patterns," International Regional Science Review, , vol. 5(2), pages 97-117, August.
    9. Gabriel M. Ahlfeldt & Stephen J. Redding & Daniel M. Sturm & Nikolaus Wolf, 2015. "The Economics of Density: Evidence From the Berlin Wall," Econometrica, Econometric Society, vol. 83, pages 2127-2189, November.
    10. Christopher Severen, 2023. "Commuting, Labor, and Housing Market Effects of Mass Transportation: Welfare and Identification," The Review of Economics and Statistics, MIT Press, vol. 105(5), pages 1073-1091, September.
    11. Nicolas Gendron-Carrier & Marco Gonzalez-Navarro & Stefano Polloni & Matthew A. Turner, 2022. "Subways and Urban Air Pollution," American Economic Journal: Applied Economics, American Economic Association, vol. 14(1), pages 164-196, January.
    12. Rainald Borck & Jan K. Brueckner, 2018. "Optimal Energy Taxation in Cities," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(2), pages 481-516.
    13. Ian W. H. Parry & Kenneth A. Small, 2009. "Should Urban Transit Subsidies Be Reduced?," American Economic Review, American Economic Association, vol. 99(3), pages 700-724, June.
    14. Albert Saiz, 2010. "The Geographic Determinants of Housing Supply," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(3), pages 1253-1296.
    15. Li, Shanjun & Liu, Yanyan & Purevjav, Avralt-Od & Yang, Lin, 2019. "Does subway expansion improve air quality?," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 213-235.
    16. Borck, Rainald, 2019. "Public transport and urban pollution," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 356-366.
    17. Mark Colas & John M. Morehouse, 2022. "The environmental cost of land‐use restrictions," Quantitative Economics, Econometric Society, vol. 13(1), pages 179-223, January.
    18. Treb Allen & Costas Arkolakis, 2022. "The Welfare Effects of Transportation Infrastructure Improvements," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(6), pages 2911-2957.
    19. Rainald Borck & Michael Pflüger, 2019. "Green cities? Urbanization, trade, and the environment," Journal of Regional Science, Wiley Blackwell, vol. 59(4), pages 743-766, September.
    20. Andadari, Roos Kities & Mulder, Peter & Rietveld, Piet, 2014. "Energy poverty reduction by fuel switching. Impact evaluation of the LPG conversion program in Indonesia," Energy Policy, Elsevier, vol. 66(C), pages 436-449.
    21. Jeuland, Marc & Tan Soo, Jie-Sheng & Shindell, Drew, 2018. "The need for policies to reduce the costs of cleaner cooking in low income settings: Implications from systematic analysis of costs and benefits," Energy Policy, Elsevier, vol. 121(C), pages 275-285.
    22. Ferdinando Monte & Stephen J. Redding & Esteban Rossi-Hansberg, 2018. "Commuting, Migration, and Local Employment Elasticities," American Economic Review, American Economic Association, vol. 108(12), pages 3855-3890, December.
    23. Bel, Germà & Holst, Maximilian, 2018. "Evaluation of the impact of Bus Rapid Transit on air pollution in Mexico City," Transport Policy, Elsevier, vol. 63(C), pages 209-220.
    24. Martínez, J. & Martí-Herrero, Jaime & Villacís, S. & Riofrio, A.J. & Vaca, D., 2017. "Analysis of energy, CO2 emissions and economy of the technological migration for clean cooking in Ecuador," Energy Policy, Elsevier, vol. 107(C), pages 182-187.
    25. Bird, Julia & Venables, Anthony J., 2020. "Land tenure and land-use in a developing city: A quantitative spatial model applied to Kampala, Uganda," Journal of Urban Economics, Elsevier, vol. 119(C).
    26. Siqi Zheng & Matthew E. Kahn, 2017. "A New Era of Pollution Progress in Urban China?," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 71-92, Winter.
    27. Proost, Stef & Van Dender, Kurt, 2001. "The welfare impacts of alternative policies to address atmospheric pollution in urban road transport," Regional Science and Urban Economics, Elsevier, vol. 31(4), pages 383-411, July.
    28. Gallego, Francisco & Montero, Juan-Pablo & Salas, Christian, 2013. "The effect of transport policies on car use: Evidence from Latin American cities," Journal of Public Economics, Elsevier, vol. 107(C), pages 47-62.
    29. Deepti Goel & Sonam Gupta, 2017. "The Effect of Metro Expansions on Air Pollution in Delhi," The World Bank Economic Review, World Bank, vol. 31(1), pages 271-294.
    30. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
    31. World Bank, 2020. "The Global Health Cost of Ambient PM2.5 Air Pollution," World Bank Publications - Reports 35721, The World Bank Group.
    32. Susanna B. Berkouwer & Joshua T. Dean, 2022. "Credit, Attention, and Externalities in the Adoption of Energy Efficient Technologies by Low-Income Households," American Economic Review, American Economic Association, vol. 112(10), pages 3291-3330, October.
    33. Gharad Bryan & Melanie Morten, 2019. "The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2229-2268.
    34. Small, Kenneth A., 2012. "Valuation of travel time," Economics of Transportation, Elsevier, vol. 1(1), pages 2-14.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Borck, Rainald & Schrauth, Philipp, 2024. "Urban pollution: A global perspective," Journal of Environmental Economics and Management, Elsevier, vol. 126(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Borck, Rainald, 2019. "Public transport and urban pollution," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 356-366.
    2. Redding, Stephen, 2020. "Trade and Geography," CEPR Discussion Papers 15268, C.E.P.R. Discussion Papers.
    3. Redding, Stephen & Nakajima, Kentaro & Miyauchi, Yuhei, 2021. "Consumption access and agglomeration: evidence from smartphone data," LSE Research Online Documents on Economics 114353, London School of Economics and Political Science, LSE Library.
    4. Seidel, Tobias & Wickerath, Jan, 2020. "Rush hours and urbanization," Regional Science and Urban Economics, Elsevier, vol. 85(C).
    5. Stephan Heblich & Stephen J Redding & Daniel M Sturm, 2020. "The Making of the Modern Metropolis: Evidence from London," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 2059-2133.
    6. Davis, Lucas W., 2021. "Estimating the price elasticity of demand for subways: Evidence from Mexico," Regional Science and Urban Economics, Elsevier, vol. 87(C).
    7. Durrmeyer, Isis & Martinez, Nicolas, 2022. "The Welfare Consequences of Urban Traffic Regulations," TSE Working Papers 22-1378, Toulouse School of Economics (TSE).
    8. Christensen, Peter & Osman, Adam, 2021. "The Demand for Mobility: Evidence from an Experiment with Uber Riders," IZA Discussion Papers 14179, Institute of Labor Economics (IZA).
    9. Cropper, Maureen & Suri, Palak, 2024. "Measuring the air pollution benefits of public transport projects," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    10. Tobias Pfutze & Carlos Rodríguez-Castelán & Daniel Valderrama, 2023. "Urban transport infrastructure and household welfare: evidence from Colombia," Empirical Economics, Springer, vol. 65(3), pages 1409-1432, September.
    11. Patricia Yañez-Pagans & Daniel Martinez & Oscar A. Mitnik & Lynn Scholl & Antonia Vazquez, 2019. "Urban transport systems in Latin America and the Caribbean: lessons and challenges," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 28(1), pages 1-25, December.
    12. Stephen J. Redding, 2021. "Suburbanization in the United States 1970-2010," Working Papers 286, Princeton University, Department of Economics, Center for Economic Policy Studies..
    13. Henderson, J. Vernon & Thisse, Jacques-François, 2024. "Urban and spatial economics after 50 years," LSE Research Online Documents on Economics 125675, London School of Economics and Political Science, LSE Library.
    14. Yuhei Miyauchi & Kentaro Nakajima & Stephen J. Redding, 2021. "The Economics of Spatial Mobility: Theory and Evidence Using Smartphone Data," NBER Working Papers 28497, National Bureau of Economic Research, Inc.
    15. Sturm,Daniel Marbod & Takeda,Kohei & Venables,Anthony J., 2022. "Exploring the Urban Model : Employment, Housing, and Infrastructure," Policy Research Working Paper Series 9910, The World Bank.
    16. Fageda, Xavier & Flores-Fillol, Ricardo & Theilen, Bernd, 2022. "Price versus quantity measures to deal with pollution and congestion in urban areas: A political economy approach," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    17. Wookun Kim, 2023. "Migration, Commuting, and the Spatial Distribution of Public Spending," Departmental Working Papers 2305, Southern Methodist University, Department of Economics.
    18. repec:hal:journl:hal-03403442 is not listed on IDEAS
    19. Li, Shanjun & Wang, Binglin & Zhou, Hui, 2024. "Decarbonizing passenger transportation in developing countries: Lessons and perspectives1," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    20. Shihe Fu & V. Brian Viard, 2022. "A mayors perspective on tackling air pollution," Chapters, in: Charles K.Y. Leung (ed.), Handbook of Real Estate and Macroeconomics, chapter 16, pages 413-437, Edward Elgar Publishing.
    21. Yanez-Pagans, Patricia & Martinez, Daniel & Mitnik, Oscar A. & Scholl, Lynn & Vazquez, Antonia, 2018. "Urban Transport Systems in Latin America and the Caribbean: Challenges and Lessons Learned," IZA Discussion Papers 11812, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    pollution; energy policy; discrete choice; developing country cities;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pot:cepadp:78. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marco Winkler (email available below). General contact details of provider: https://edirc.repec.org/data/cepotde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.