Essays on Shared Resources Under Climate Change

Abstract

In this dissertation, I use tools from development and public economics to study the economics of shared resources (water and electric vehicle chargers) under climate change in two contexts: climate adaptation in developing countries (South Africa) and climate mitigation in developed countries (the United States). In the first chapter, I investigate in-kind transfers as a policy option for protecting the poor during environmental crisis. I argue that the equity-efficiency tradeoff posed by in-kind transfers under scarcity is minimized when targeted households have low demand elasticities for the scarce good. I estimate the demand elasticity of households receiving limited allocations of free and discounted water during the severe “Day Zero" drought in 2017-2018 in Cape Town, South Africa. I show that, contrary to evidence on water demand in other contexts, low-income households in Cape Town decrease their water use by only 0.22% in response to a 1-Rand ($0.056) increase in the price of water, implying an elasticity between -0.9% and -9.2%. I then investigate potential explanations for this low elasticity and show via a household survey with embedded information intervention that a substantial proportion of households in Cape Town do not know their marginal water price, which may drive their inelasticity. In the second chapter, joint with Alexander Abajian, B. Kelsey Jack, Kyle C. Meng, and Martine Visser, I study the role of publicly-provided utility services in climate adaptation in the context of a near-catastrophic drought in Cape Town, South Africa. First, to reduce aggregate water demand, the public utility increased prices, leading to large demand reductions by richer households. Prior to the drought they use twice the public piped water of poorer households. At the peak of the drought, they use less. Second, some of the differential demand reduction comes from richer households substituting away from public water toward privately financed groundwater. This private adaptation both lowers the public utility's total revenue and shifts costs onto poorer households, consequences that persist after the drought abates. Third, policy interventions mitigate some of the fiscal and distributional impacts of private adaptation. These findings highlight how climate adaptation, in the context of publicly provided goods and services, can create pecuniary and environmental externalities with equity consequences. In the third chapter, joint with Omar Isaac Asensio, Elaine Buckberg, Luke Heeney, Christopher Knittel, and James H. Stock, I document a key barrier to the adoption of carbon emissions-mitigating electric vehicles (EVs) in the United states: real-time data on charging station status at DC fast chargers on US highways. Charging infrastructure is critical to EV adoption, but for chargers to be most useful, EV drivers need to know in real time where they are and whether they are working and available. We investigate the availability of real-time data from DC fast chargers on six major US Interstates and model the impacts of expanding access to real-time data to all DC fast chargers near highways. On average, between March and August 2024, 32.9% of DC fast charging stations adjacent to those six Interstates provided their real-time status on PlugShare, a major charge-finding app, with gaps of up to 1,308 miles without real-time data. Further, we survey potential car buyers and EV owners and find low credibility of currently-available real-time data. We incorporate this data into a two-sided model of consumer vehicle choice and charging station buildout adapted from Cole et al. (2023). If universal real-time data is accompanied by improved charger uptime and driver confidence in the accuracy of the real-time data, we predict that the EV share of new vehicle sales would grow by 8.0 percentage points in 2030, expanding the EV fleet by 13.2%, and reducing 2030 carbon emissions by 22.5 mmt, versus baseline projections for 2030.