Subhrendu K. Pattanayak (Duke University), “Economics of household energy transitions: Evidence from the Indian Himalayas”, Environment Economics Seminar, Toulouse: TSE, April 24, 2017, 11:00–12:15, room MS 003.
Improved cookstoves allegedly deliver “triple wins” by improving health and environmental quality, and mitigating climate change. Yet recent research casts doubt on their potential for widespread diffusion. In the first multi-year experimental study to offer households a choice between multiple devices, we challenge this pessimism. Random assignment to a three-pronged supply-and-promotion intervention (provision, information/demonstration, and financing) induced over half of targeted households to purchase an improved cookstove, with high demand observed for an electric device in particular. Increased adoption also reduced solid-fuel use (worth up to $2 per household-month in emissions savings) and fuel-collection times. This high latent demand among rural households unfortunately remains unserved by existing supply chains in remote settings, as evidenced by the fact that similar technologies are not found in the control group. We also look beyond treatment effects to uncover two critical aspects of supply and demand. First, we use a discrete choice experiment in the baseline (pre-experiment) to identify household types. These types help explain choices made during a stove promotion campaign. Second, we stratify our study sample by communities (pre-experiment) where micro-institutions such as NGOs have deep roots and match these with observationally similar communities that do not have deep roots. We find that households in NGO communities were more likely to purchase and use the improved stoves, providing new support for new institutional economics logic that such micro-institutions reduce transaction costs. We conclude by (a) reflecting on the misplaced focus on “improved stoves” by international donors (e.g., Global Alliance for Clean Cookstoves), and by (b) describing an action research agenda that relies heavily on regional and global networks to learn in a systematic and coordinated manner.