Research 

Working Papers

Why Conservation Policy Backfires: Evidence from Indonesia's Forest Moratorium   (JMP)

Conservation policies in developing countries often fall short of expectations. Yet, the mechanisms underlying cases of limited efficacy remain poorly understood. This paper revisits Indonesia's 2011 forest moratorium to investigate why forest loss persisted despite the suspension of new logging and plantation licenses in primary forests. The analysis combines high-resolution satellite data on annual tree cover loss and fire hotspots with local economic statistics, employing grid-year variation for empirical identification. The results indicate persistently high deforestation within moratorium areas after 2011. This can be explained by three mechanisms. First, although the moratorium curtailed formal concession expansion, design loopholes incentivised informal and illegal clearing to degrade the forest within the moratorium, as evidenced by a rise in ignition events. Second, the policy led to an employment decline in the forestry industry, resulting in contractions in formal concession activity and a shift toward informal and unrecorded land clearing. Third, environmental expenditure remained subdued, suggesting weak implementation capacity. Overall, the results suggest that informal and small-scale fire clearing might substitute for regulated land conversion, driven by design loopholes, weak enforcement and local employment pressures. 

Feeling Tropical: Effects of Extreme Temperature and Humidity on Subjective and Objective Health Outcomes in Indonesia (under review)

Climate change presents significant health risks, yet evidence from tropical, developing countries remains scarce. This study examines how temperature and humidity affect health in Indonesia, using detailed individual-level health data combined with high-resolution weather records. We find that subjective health is highly responsive to daily weather, while there are only limited short-term effects on various objective health outcomes. We identify sleep disruption as an important mechanism through which temperature and humidity affect subjective health. The results further show that subjective health is a meaningful predictor of future clinical deterioration and economic impacts. Our findings emphasise the unique dynamics at play in tropical regions in the health-temperature relationship, complementing the existing evidence for temperate regions.

Working in Progress

Environmental Regulation, Energy Prices and Innovation: Empirical Evidence from Manufacturing Sectors across OECD Countries

The existing evidence about how the industry responds to tighter environmental regulation trends is inconclusive. Several studies have identified a positive correlation between environmental regulations and innovation, but the relationship may not be causal. In this study, we investigate this relationship using a multiplicative interaction panel model. We distinguish two complementary measures of environmental regulation, the OECD Environmental Policy Stringency (EPS) indicator and energy prices, and interact them with pollution and energy intensity as industry characteristics, respectively. Using data from OECD manufacturing sectors during 2000–2019, we find that increases in energy prices have a negative and statistically significant impact on innovation, especially for energy-intensive industries. In contrast, increases in EPS have a positive effect on innovation. We demonstrate that these results are unlikely to be influenced by reverse causality using the two-step system generalised method of moments (GMM) estimation methods and are robust to a range of checks.