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The Welfare Impacts of Rural Electrification in Bangladesh

Shahidur R. Khandker, Douglas F. Barnes, and Hussain A. Samad

Year: 2012
Volume: Volume 33
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol33-No1-7
View Abstract

Lack of access to electricity has been considered a major impediment to the growth and development of rural economies. Thus, the provision of electricity and other forms of modern energy has been a priority for many development organizations, including the World Bank. However, few impact studies of electrification have taken the endogeneity of the grid connection into account. Using a cross-sectional survey conducted in 2005 of 20,900 rural households in Bangladesh, this paper examines the welfare impacts of household access to grid electricity after controlling for endogeneity bias. The econometric analysis shows that grid electrification has significant positive impacts on household income, expenditure, and education. The household gain in total income due to electrification is as high as 21 percent, with a 1.5 percentage point reduction in poverty per year. The results also suggest that the income and expenditure effects of electricity connection are higher for better-off households. Keywords: Rural electrification, Electrification impacts, Distributional impacts, Bangladesh

Is Abundant Natural Gas a Bridge to a Low-carbon Future or a Dead-end?

Kenneth Gillingham and Pei Huang

Year: 2019
Volume: Volume 40
Number: Number 2
DOI: 10.5547/01956574.40.2.kgil
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A fierce debate rages on whether abundant natural gas is a bridge to a low-carbon future or a hindrance to long-term decarbonization. This paper uses a detailed energy-economic market equilibrium model to study the effects of an upper bound case of natural gas availability. We show that a market-driven abundant natural gas supply can provide substantial reductions in air pollution but does not considerably reduce CO2 emissions in the longer-term, especially relative to a moderate carbon price. However, we quantify large welfare benefits from abundant natural gas. The spatial disaggregation of our results allows for a clear picture of the distributional impacts of abundant natural gas under different carbon price scenarios, illustrating welfare gains by most regions regardless of whether there is carbon pricing, but substantial heterogeneity in the welfare gains.

Quantifying the Distributional Impact of Energy Efficiency Measures

Daire McCoy and Raphaela A. Kotsch

Year: 2021
Volume: Volume 42
Number: Number 6
DOI: 10.5547/01956574.42.6.dmcc
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The distributional impact of the low-carbon transition is an increasingly important topic both for academics and policymakers. Quantifying where the costs and benefits fall can provide greater insight into the equity and cost-effectiveness of government policies, and improve our understanding of household investment decisions. This paper provides new evidence on the distribution of returns from energy efficiency measures both over time and across household-type. A range of econometric techniques are applied to a database of over four million households over an eight year period to quantify heterogeneity, persistence and how these factors impact the relative cost-effectiveness of measures. Results suggest that more deprived households experience lower energy savings, the difference persists over time, and that significantly heterogeneity may be present across levels of deprivation and income deciles that can not be explained by differences in baseline consumption. Measures have been largely cost-effective but savings are much lower than previous policy evaluations using ex-ante estimates would suggest.

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