Research 

Working Papers 

• Coal-fired power plants and industrial development (with Leonard Missbach, Jan Steckel and Sebastian Kraus)

Past periods of industrial development have gone hand in hand with the burning of coal, but there is little evidence on the effects of coal infrastructure on manufacturing growth in today's industrializing economies. We quantify the direct and indirect effects of coal-fired power plant commissioning on local incumbent manufacturing firms in Indonesia during a coal phase-in period between 1984 and 2015. We analyze spatially and temporally explicit manufacturing and power plant data in a stacked difference-in-difference framework. Leveraging quasi-random variation in treatment timing, we show that coal-fired power plants have led incumbent larger firms to increase employment, inputs, and outputs. In contrast, smaller firms remained unaffected. We identify mediating channels including improved electricity supply and transportation infrastructure, and increased competition for labor. Ongoing efforts to reduce global coal capacity need to take such effects into account.

• Energy Prices, Generators, and the Performance of Manufacturing Firms (with Krisztina Kis-Katos and Hannes Greve) - new version coming soon - 

Energy price subsidies and the use of generators by firms are common in low- and middle-income countries, leading to a critical mix of inefficient production structures. In the context of often unreliable electricity supply infrastructure, targeted subsidy reductions for fuel and electricity are politically challenging due to fears of adverse effects on production, further complicated by the widespread use of generators. We exploit a large energy subsidy reduction policy using a rich panel data set of manufacturing firms in Indonesia to estimate the impact on the performance of manufacturing firms. We find that firms experience slightly lower productivity and reduce output by lowering inputs of energy, materials, capital, and labor. Increases in diesel tariffs lead to nonadoption, while increases in electricity tariffs appear to lead to adoption of generator use. We also find that generator-dependent firms reduce total output, value added, material inputs, and labor relative to other firms as fuel tariffs increase. Our findings have important implications for the design of climate and energy policies, particularly in contexts where many firms rely on generators for electricity generation. 

Selected work in progress

• Macro-Micro Data Gaps, Targeting Transfers and the Incidence of Carbon Pricing (with  Arief A. Yusuf, Jan Steckel and Djoni Hartono)

Our analysis explores the full range of the vertical and horizontal distributional impacts of carbon pricing, while addressing two important issues prevalent in low- and middle income countries. First, there is a large observed gap between survey based and national accounts aggregates of household income. We address this gap by adjusting the survey based income distribution with correction factors based on detailed national accounts data and simulated distribution functions. Ignoring this data gap is shown to severely underestimate income inequality and results in skewed distributional impacts. Beyond this measurement issue, the second focus is on the institutional capacity for redistribution via social transfers. We identify available revenue recycling scenarios, drawing both on hypothetical and existing social transfer schemes in Indonesia, including unconditional cash transfers based on social registry information. While all revenue recycling schemes significantly reduce the average burden, available targeting mechanisms of social protection infrastructure are imperfect and exclude a substantial share of poor and vulnerable households. Our study has important implications beyond environmental policy, illustrating the empirical challenges of understanding the distributional implications of economic shocks in LMICs.

• Shock Propagation in Global Supply Chains (with Bastian Westbrock and Maarten Bosker)

• Heat and firm productivity: Evidence from Indonesia's manufacturing sector (with  Enrica de Cian, Robert Genthner and Filippo Pavanello)

• Vertical and Horizontal Equity of Carbon Taxes under Imperfect Targeting

• Production Networks and Competitiveness Impacts of Climate Policies

• Land Use Change, Land markets and Ecosystem Services in an Ecologic-Economic Agent Based Model for Indonesia (with Sebastian Fiedler, Kerstin Wiegand and Jann Lay)

• Nonlinear Prices, Poverty and Conditional Cash Transfers in Indonesia

Publications

Smallholder RSPO certification, economic benefits and agrochemical use (with Anette Ruml, Tabea Lakemann, Nunung Nuryartono, Aiyen Tjoa, Marife D. Corre and Jann Lay) , 2024,  Environmental Research Letters 

Sustainability standards, such as the Roundtable for Sustainable Palm Oil (RSPO), can potentially mitigate the trade-offs between economic benefits and environmental harm of oil palm expansion. Using unique primary household and farm level panel data collected from Jambi Province, Indonesia, we first document the differences in agricultural inputs and outputs between certified and non-certified smallholder farmers. Second, we illustrate the potential implications and mechanisms of certification. In this study, therefore, we aim to first document agricultural input and output differences between certified and non-certified smallholder farmers, second to illustrate potential effects of certification with observational data and third to provide guidance for future rigorous causal analyses. We find generally positive correlations between RSPO certification, land productivity, profits, and fertilizer use, and a negative correlation with toxic herbicide use. However, we do not find price premiums for RSPO-certified farmers. Overall, the results of this study are indicative of potentially modest effects of RSPOcertification that may operate through higher productivity due to improved management practices that remain agrochemical intensive but avoid some particularly harmful chemicals. Our findings are relevant to better understand the strong sustainability claims of RSPO marketing and to provide guidance for rigorous causal experimental and quasi-experimental studies

Air-Conditioning and the Adaptation Cooling Deficit in Emerging Economies (with Enrica De Cian,  Filippp Pavanello, Marinella Davide, Malcom Mistry, T. Cruz, P. Borges, D. Jagu, Roberto Schaffer and  A. Lucena) , 2021, Nature Communications

Climate Policy and Distributional Impacts in Developing Asia (with Jan Steckel, Ira Dorband, Lorenzo Montrone, Hauke Ward, Leonard Missbach, Fabian Hafner, Michael Jakob) 2021,  Nature Sustainability

Distributional Impacts of Carbon Pricing in Low- and Middle- Income Countries (with Jan Steckel and Leonard Missbach), 2021, CESifo Forum

 The Effects of Energy Price Changes: Heterogeneous Welfare Impacts and Energy Poverty in Indonesia (with Jann Lay and Michael Hillebrand), 2019, Environment and Development Economics

The Social and Economic Situation of the Scheduled Tribes in India (with Daniel Neff, C.W. Haasnoot and Kunal Sen), 2019, in: Routledge Handbook of Indigenous Well-being 

Household Welfare and CO2 Emission Impacts of Energy and Carbon Taxes in Mexico (with Jann Lay and Hannes Greve), 2018, Energy Economics 

Poverty and Distributional Effects of a Carbon Tax in Mexico, 2018, Energy Policy 

Feasible Mitigation Actions in Developing Countries (with Michael Jakob, Jan Steckel, Stephan Klasen, Jann Lay, Nicole Grunewald, Inmaculada Martinez-Zarzoso and Ottmar Edenhofer, 2014,  Nature Climate Change