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    Bringing an investigator’s eye to complex social challenges

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    Anna Russo likes puzzles. They require patience, organization, and a view of the big picture. She brings an investigator’s eye to big institutional and societal challenges whose solutions can have wide-ranging, long-term impacts.

    Russo’s path to MIT began with questions. She didn’t have the whole picture yet. “I had no idea what I wanted to do with my life,” says Russo, who is completing her PhD in economics in 2024. “I was good at math and science and thought I wanted to be a doctor.”

    While completing her undergraduate studies at Yale University, where she double majored in economics and applied math, Russo discovered a passion for problem-solving, where she could apply an analytical lens to answering the kinds of thorny questions whose solutions could improve policy. “Empirical research is fun and exciting,” Russo says.

    After Yale, Russo considered what to do next. She worked as a full-time research assistant with MIT economist Amy Finkelstein. Russo’s work with Finkelstein led her toward identifying, studying, and developing answers to complex questions. 

    “My research combines ideas from two fields of economic inquiry — public finance and industrial organization — and applies them to questions about the design of environmental and health care policy,” Russo says. “I like the way economists think analytically about social problems.”

    Narrowing her focus

    Studying with and being advised by renowned economists as both an undergraduate and a doctoral student helped Russo narrow her research focus, fitting more pieces into the puzzle. “What drew me to MIT was its investment in its graduate students,” Russo says.

    Economic research meant digging into policy questions, identifying market failures, and proposing solutions. Doctoral study allowed Russo to assemble data to rigorously follow each line of inquiry.

    “Doctoral study means you get to write about something you’re really interested in,” Russo notes. This led her to study policy responses to climate change adaptation and mitigation. 

    “In my first year, I worked on a project exploring the notion that floodplain regulation design doesn’t do a good job of incentivizing the right level of development in flood-prone areas,” she says. “How can economists help governments convince people to act in society’s best interest?”

    It’s important to understand institutional details, Russo adds, which can help investigators identify and implement solutions. 

    “Feedback, advice, and support from faculty were crucial as I grew as a researcher at MIT,” she says. Beyond her two main MIT advisors, Finkelstein and economist Nikhil Agarwal — educators she describes as “phenomenal, dedicated advisors and mentors” — Russo interacted regularly with faculty across the department. 

    Russo later discovered another challenge she hoped to solve: inefficiencies in conservation and carbon offset programs. She set her sights on the United States Department of Agriculture’s Conservation Reserve Program because she believes it and programs like it can be improved. 

    The CRP is a land conservation plan administered by USDA’s Farm Service Agency. In exchange for a yearly rental payment, farmers enrolled in the program agree to remove environmentally sensitive land from agricultural production and plant species that will improve environmental health and quality.

    “I think we can tweak the program’s design to improve cost-effectiveness,” Russo says. “There’s a trove of data available.” The data include information like auction participants’ bids in response to well-specified auction rules, which Russo links to satellite data measuring land use outcomes. Understanding how landowners bid in CRP auctions can help identify and improve the program’s function. 

    “We may be able to improve targeting and achieve more cost-effective conservation by adjusting the CRP’s scoring system,” Russo argues. Opportunities may exist to scale the incremental changes under study for other conservation programs and carbon offset markets more generally.  

    Economics, Russo believes, can help us conceptualize problems and recommend effective alternative solutions.

    The next puzzle

    Russo wants to find her next challenge while continuing her research. She plans to continue her work as a junior fellow at the Harvard Society of Fellows, after which she’ll join the Harvard Department of Economics as an assistant professor. Russo also plans to continue helping other budding economists since she believes in the importance of supporting other students.   

    Russo’s advisors are some of her biggest supporters. 

    Finklestein emphasizes Russo’s curiosity, enthusiasm, and energy as key drivers in her success. “Her genuine curiosity and interest in getting to the bottom of a problem with the data — with an econometric analysis, with a modeling issue — is the best antidote for [the stress that can be associated with research],” Finklestein says. “It’s a key ingredient in her ability to produce important and credible work.”

    “She’s also incredibly generous with her time and advice,” Finklestein continues, “whether it’s helping an undergraduate research assistant with her senior thesis, or helping an advisor such as myself navigate a data access process she’s previously been through.”

    “Instead of an advisor-advisee relationship, working with her on a thesis felt more like a collaboration between equals,” Agarwal adds. “[She] has the maturity and smarts to produce pathbreaking research.

    “Doctoral study is an opportunity for students to find their paths collaboratively,” Russo says. “If I can help someone else solve a small piece of their puzzle, that’s a huge positive. Research is a series of many, many small steps forward.” 

    Identifying important causes for further investigation and study will always be important to Russo. “I also want to dig into some other market that’s not working well and figure out how to make it better,” she says. “Right now I’m really excited about understanding California wildfire mitigation.” 

    Puzzles are made to be solved, after all. More

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      in Energy

      A delicate dance

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      In early 2022, economist Catherine Wolfram was at her desk in the U.S. Treasury building. She could see the east wing of the White House, just steps away.

      Russia had just invaded Ukraine, and Wolfram was thinking about Russia, oil, and sanctions. She and her colleagues had been tasked with figuring out how to restrict the revenues that Russia was using to fuel its brutal war while keeping Russian oil available and affordable to the countries that depended on it.

      Now the William F. Pounds Professor of Energy Economics at MIT, Wolfram was on leave from academia to serve as deputy assistant secretary for climate and energy economics.

      Working for Treasury Secretary Janet L. Yellen, Wolfram and her colleagues developed dozens of models and forecasts and projections. It struck her, she said later, that “huge decisions [affecting the global economy] would be made on the basis of spreadsheets that I was helping create.” Wolfram composed a memo to the Biden administration and hoped her projections would pan out the way she believed they would.

      Tackling conundrums that weigh competing, sometimes contradictory, interests has defined much of Wolfram’s career.

      Wolfram specializes in the economics of energy markets. She looks at ways to decarbonize global energy systems while recognizing that energy drives economic development, especially in the developing world.

      “The way we’re currently making energy is contributing to climate change. There’s a delicate dance we have to do to make sure that we treat this important industry carefully, but also transform it rapidly to a cleaner, decarbonized system,” she says.

      Economists as influencers

      While Wolfram was growing up in a suburb of St. Paul, Minnesota, her father was a law professor and her mother taught English as a second language. Her mother helped spawn Wolfram’s interest in other cultures and her love of travel, but it was an experience closer to home that sparked her awareness of the effect of human activities on the state of the planet.

      Minnesota’s nickname is “Land of 10,000 Lakes.” Wolfram remembers swimming in a nearby lake sometimes covered by a thick sludge of algae. “Thinking back on it, it must’ve had to do with fertilizer runoff,” she says. “That was probably the first thing that made me think about the environment and policy.”

      In high school, Wolfram liked “the fact that you could use math to understand the world. I also was interested in the types of questions about human behavior that economists were thinking about.

      “I definitely think economics is good at sussing out how different actors are likely to react to a particular policy and then designing policies with that in mind.”

      After receiving a bachelor’s degree in economics from Harvard University in 1989, Wolfram worked with a Massachusetts agency that governed rate hikes for utilities. Seeing its reliance on research, she says, illuminated the role academics could play in policy setting. It made her think she could make a difference from within academia.

      While pursuing a PhD in economics from MIT, Wolfram counted Paul L. Joskow, the Elizabeth and James Killian Professor of Economics and former director of the MIT Center for Energy and Environmental Policy Research, and Nancy L. Rose, the Charles P. Kindleberger Professor of Applied Economics, among her mentors and influencers.

      After spending 1996 to 2000 as an assistant professor of economics at Harvard, she joined the faculty at the Haas School of Business at the University of California at Berkeley.

      At Berkeley, it struck Wolfram that while she labored over ways to marginally boost the energy efficiency of U.S. power plants, the economies of China and India were growing rapidly, with a corresponding growth in energy use and carbon dioxide emissions. “It hit home that to understand the climate issue, I needed to understand energy demand in the developing world,” she says.

      The problem was that the developing world didn’t always offer up the kind of neatly packaged, comprehensive data economists relied on. She wondered if, by relying on readily accessible data, the field was looking under the lamppost — while losing sight of what the rest of the street looked like.

      To make up for a lack of available data on the state of electrification in sub-Saharan Africa, for instance, Wolfram developed and administered surveys to individual, remote rural households using on-the-ground field teams.

      Her results suggested that in the world’s poorest countries, the challenges involved in expanding the grid in rural areas should be weighed against potentially greater economic and social returns on investments in the transportation, education, or health sectors.

      Taking the lead

      Within months of Wolfram’s memo to the Biden administration, leaders of the intergovernmental political forum Group of Seven (G7) agreed to the price cap. Tankers from coalition countries would only transport Russian crude sold at or below the price cap level, initially set at $60 per barrel.

      “A price cap was not something that had ever been done before,” Wolfram says. “In some ways, we were making it up out of whole cloth. It was exciting to see that I wrote one of the original memos about it, and then literally three-and-a-half months later, the G7 was making an announcement.

      “As economists and as policymakers, we must set the parameters and get the incentives right. The price cap was basically asking developing countries to buy cheap oil, which was consistent with their incentives.”

      In May 2023, the U.S. Department of the Treasury reported that despite widespread initial skepticism about the price cap, market participants and geopolitical analysts believe it is accomplishing its goals of restricting Russia’s oil revenues while maintaining the supply of Russian oil and keeping energy costs in check for consumers and businesses around the world.

      Wolfram held the U.S. Treasury post from March 2021 to October 2022 while on leave from UC Berkeley. In July 2023, she joined MIT Sloan School of Management partly to be geographically closer to the policymakers of the nation’s capital. She’s also excited about the work taking place elsewhere at the Institute to stay ahead of climate change.

      Her time in D.C. was eye-opening, particularly in terms of the leadership power of the United States. She worries that the United States is falling prey to “lost opportunities” in terms of addressing climate change. “We were showing real leadership on the price cap, and if we could only do that on climate, I think we could make faster inroads on a global agreement,” she says.

      Now focused on structuring global agreements in energy policy among developed and developing countries, she’s considering how the United States can take advantage of its position as a world leader. “We need to be thinking about how what we do in the U.S. affects the rest of the world from a climate perspective. We can’t go it alone.

      “The U.S. needs to be more aligned with the European Union, Canada, and Japan to try to find areas where we’re taking a common approach to addressing climate change,” she says. She will touch on some of those areas in the class she will teach in spring 2024 titled “Climate and Energy in the Global Economy,” offered through MIT Sloan.

      Looking ahead, she says, “I’m a techno optimist. I believe in human innovation. I’m optimistic that we’ll find ways to live with climate change and, hopefully, ways to minimize it.”

      This article appears in the Winter 2024 issue of Energy Futures, the magazine of the MIT Energy Initiative. More

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      in Environment

      Anushree Chaudhuri: Involving local communities in renewable energy planning

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      Anushree Chaudhuri has a history of making bold decisions. In fifth grade, she biked across her home state of California with little prior experience. In her first year at MIT, she advocated for student recommendations in the preparation of the Institute’s Climate Action Plan for the Decade. And recently, she led a field research project throughout California to document the perspectives of rural and Indigenous populations affected by climate change and clean energy projects.

      “It doesn’t matter who you are or how young you are, you can get involved with something and inspire others to do so,” the senior says.

      Initially a materials science and engineering major, Chaudhuri was quickly drawn to environmental policy issues and later decided to double-major in urban studies and planning and in economics. Chaudhuri will receive her bachelor’s degrees this month, followed by a master’s degree in city planning in the spring.

      The importance of community engagement in policymaking has become one of Chaudhuri’s core interests. A 2024 Marshall Scholar, she is headed to the U.K. next year to pursue a PhD related to environment and development. She hopes to build on her work in California and continue to bring attention to impacts that energy transitions can have on local communities, which tend to be rural and low-income. Addressing resistance to these projects can be challenging, but “ignoring it leaves these communities in the dust and widens the urban-rural divide,” she says.

      Silliness and sustainability 

      Chaudhuri classifies her many activities into two groups: those that help her unwind, like her living community, Conner Two, and those that require intensive deliberation, like her sustainability-related organizing.

      Conner Two, in the Burton-Conner residence hall, is where Chaudhuri feels most at home on campus. She describes the group’s activities as “silly” and emphasizes their love of jokes, even in the floor’s nickname, “the British Floor,” which is intentionally absurd, as the residents are rarely British.

      Chaudhuri’s first involvement with sustainability issues on campus was during the preparation of MIT’s Fast Forward Climate Action Plan in the 2020-2021 academic year. As a co-lead of one of several student working groups, she helped organize key discussions between the administration, climate experts, and student government to push for six main goals in the plan, including an ethical investing framework. Being involved with a significant student movement so early on in her undergraduate career was a learning opportunity for Chaudhuri and impressed upon her that young people can play critical roles in making far-reaching structural changes.

      The experience also made her realize how many organizations on campus shared similar goals even if their perspectives varied, and she saw the potential for more synergy among them.

      Chaudhuri went on to co-lead the Student Sustainability Coalition to help build community across the sustainability-related organizations on campus and create a centralized system that would make it easier for outsiders and group members to access information and work together. Through the coalition, students have collaborated on efforts including campus events, and off-campus matters such as the Cambridge Green New Deal hearings.

      Another benefit to such a network: It creates a support system that recognizes even small-scale victories. “Community is so important to avoid burnout when you’re working on something that can be very frustrating and an uphill battle like negotiating with leadership or seeking policy changes,” Chaudhuri says.

      Fieldwork

      For the past year, Chaudhuri has been doing independent research in California with the support of several advisory organizations to host conversations with groups affected by renewable energy projects, which, as she has documented, are often concentrated in rural, low-income, and Indigenous communities. The introduction of renewable energy facilities, such as wind and solar farms, can perpetuate existing inequities if they ignore serious community concerns, Chaudhuri says.

      As state or federal policymakers and private developers carry out the permitting process for these projects, “they can repeat histories of extraction, sometimes infringing on the rights of a local or Tribal government to decide what happens with their land,” she says.

      In her site visits, she is documenting community opposition to controversial solar and wind proposals and collecting oral histories. Doing fieldwork for the first time as an outsider was difficult for Chaudhuri, as she dealt with distrust, unpredictability, and needing to be completely flexible for her sources. “A lot of it was just being willing to drop everything and go and be a little bit adventurous and take some risks,” she says.

      Role models and reading

      Chaudhuri is quick to credit many of the role models and other formative influences in her life.

      After working on the Climate Action Plan, Chaudhuri attended a public narrative workshop at Harvard University led by Marshall Ganz, a grassroots community organizer who worked with Cesar Chavez and on the 2008 Obama presidential campaign. “That was a big inspiration and kind of shaped how I viewed leadership in, for example, campus advocacy, but also in other projects and internships.”

      Reading has also influenced Chaudhuri’s perspective on community organizing, “After the Climate Action Plan campaign, I realized that a lot of what made the campaign successful or not could track well with organizing and social change theories, and histories of social movements. So, that was a good experience for me, being able to critically reflect on it and tie it into these other things I was learning about.”

      Since beginning her studies at MIT, Chaudhuri has become especially interested in social theory and political philosophy, starting with ancient forms of Western and Eastern ethic, and up to 20th and 21st century philosophers who inspire her. Chaudhuri cites Amartya Sen and Olúfẹ́mi Táíwò as particularly influential. “I think [they’ve] provided a really compelling framework to guide a lot of my own values,” she says.

      Another role model is Brenda Mallory, the current chair of the U.S. Council on Environmental Quality, who Chaudhuri was grateful to meet at the United Nations COP27 Climate Conference. As an intern at the U.S. Department of Energy, Chaudhuri worked within a team on implementing the federal administration’s Justice40 initiative, which commits 40 percent of federal climate investments to disadvantaged communities. This initiative was largely directed by Mallory, and Chaudhuri admires how Mallory was able to make an impact at different levels of government through her leadership. Chaudhuri hopes to follow in Mallory’s footsteps someday, as a public official committed to just policies and programs.

       “Good leaders are those who empower good leadership in others,” Chaudhuri says. More

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      in Environment

      Illustrating India’s complex environmental crises

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      Abhijit Banerjee, the Ford Foundation International Professor of Economics at MIT, and Sarnath Banerjee (no relation), an MIT Center for Art, Science, and Technology (CAST) visiting artist share a similar background, but have very different ways of thinking. Both were raised for a time in Kolkata before leaving India to pursue divergent careers, Abhijit as an economist who went on to win the 2019 Nobel Memorial Prize in Economic Sciences (an award he shares with MIT Professor Esther Duflo and Harvard University Professor Michael Kremer), and Sarnath as a visual artist and graphic novelist. 

      The two collaborated on a pair of short films, “The Land of Good Intentions” and “The Eternal Swamp,” that blend their expertise in a unique and captivating form. Each film addresses a particular environmental crisis facing present-day India by tracing its origins back through the centuries. The films are presented in a kind of lecture style, with Abhijit appearing as the narrator, unraveling historical details, as graphics by Sarnath visualize the story with an often wry and easy wit. The results apply logic and narrative coherence to problems with complex roots in the forces of nature, economics, and local culture. 

      “The Land of Good Intentions” explores the conditions and policies that led to mass protests by farmers, in Punjab and elsewhere, following the passage of farming legislation in September 2020. The film begins by providing historical context from multiple angles, including the significance of rice to regional culture, its growing conditions (which require a lot of water), the region’s climate (which produces very little), and previous government subsidies that led to its overproduction. The 2020 Farm Bills were intended to address rice overproduction and its consequences, including the depletion of Punjab’s groundwater supply, pollution from the burning of rice stalks, and a surplus going to waste. But farmers considered that they were being asked to shoulder the costs of a problem the government created. 

      “The arguments in the film don’t necessarily align with popular liberal arguments, but it gives subtler shape and layers to them,” Sarnath says. “That dialectical way of thinking is important to the liberal movement, which is driven by passion and a sense of justice. Abhijit is driven by factual analysis, which sometimes makes the argument more complex.”

      Their second film, “The Eternal Swamp,” addresses the crisis of flooding in Kolkata and its causes in the geographical and economic development of the city from the start. Because Kolkata was built on very wet land, and real estate has long been one of the only viable industries in the city, it has been developed without regard to proper drainage in a climate that produces more rainfall than it can handle. There is a pervading sense that Kolkata will eventually be entirely below water.

      “It was a good collaboration from the beginning,” Sarnath says of working with Abhijit on the CAST Visiting Artist project, a process which began just before Abhijit was awarded the Nobel Prize in 2019 and continued through the pandemic. “Both of us work on instinct, but the way he shapes an argument is very different from me,” Sarnath says. “My work does not follow a linear approach to telling a story; it’s fragmentary, driven by mood and emotion more than narrative, like composing a piece of music.”

      Since they first met at a literary conference years ago, Abhijit and Sarnath have been close friends and intellectual sparring partners. Though Sarnath is based in Berlin and Abhijit in Boston, the two often cross paths in different locales and have long, ambling discussions that traverse a wide array of topics. “We spend a lot of time walking together wherever we find ourselves, whether it’s down the Longfellow Bridge in Boston or through Delhi or Kolkata,” Sarnath says. The idea for this project was born out of such conversations, in response to pressing events in their home country. 

      Abhijit wrote a proposal to MIT CAST, and the questions they received through the process helped them further shape the project. “It’s important, when you have the luxury, just to spend time together. Thanks to MIT, we managed to do that across continents,” Sarnath says of their creative process. “It’s more than just telling a story; Abhijit unpacked what was in his head, and I drew and wrote a bit as well,” Sarnath says. And they worked with the editor and animator Niusha Ramzani, whom Sarnath says lent an Iranian aesthetic to the film’s animations. 

      As for the format of the films, they wanted to capture the sense of a serene Bengali afternoon, with Abhijit seated in his home in Kolkata speaking in a relaxed tone. “We wanted it to be a bit like a Royal Society lecture,” Sarnath says, somewhat like a TED Talk but more personable and intimate. The aim was to make their complicated subjects more easily comprehensible, through the language of Abhijit’s narration and with the help of visual metaphors. Still, they did not want to sacrifice complexity.

      “Economists are fabulists,” says Abhijit Banerjee. “We tell stories, simple stories, but that tends to get obscured in the telling, often because we like to be very careful about not overstating our case. Irony and the kind of playful humor that Sarnath brings to narration seemed to offer a different way to avoid being too emphatic, while allowing the story to be told in a way that it reaches a much larger audience. What is brilliant about Sarnath’s work is the play between reliable and the unreliable — the readers are happy to be misdirected because they know that it will ultimately lead them where they want to be. I was hoping we could bring a little of that into economics.” 

      “You have to emancipate yourself from any one definitive answer,” Sarnath Banerjee says, describing Abhijit’s expansive way of thinking, through which he follows multiple thought processes to their logical conclusions. The result allows for ambiguity and contradiction, though the pathways of thinking are clear. The films illustrate the situations facing farmers in Punjab and the waterlogged streets of Kolkata by tracing their roots and examining the history of cause and effect. The results provide clarity, but no simple answers.

      The process was an enriching one for both of them, the kind of advancement in understanding that can only come in dialogue. “With each collaboration, you learn, and learning to me is an artistic form,” Sarnath says. “We are always learning.” More

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      in Energy

      MIT researchers map the energy transition’s effects on jobs

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      A new analysis by MIT researchers shows the places in the U.S. where jobs are most linked to fossil fuels. The research could help policymakers better identify and support areas affected over time by a switch to renewable energy.

      While many of the places most potentially affected have intensive drilling and mining operations, the study also measures how areas reliant on other industries, such as heavy manufacturing, could experience changes. The research examines the entire U.S. on a county-by-county level.

      “Our result is that you see a higher carbon footprint for jobs in places that drill for oil, mine for coal, and drill for natural gas, which is evident in our maps,” says Christopher Knittel, an economist at the MIT Sloan School of Management and co-author of a new paper detailing the findings. “But you also see high carbon footprints in areas where we do a lot of manufacturing, which is more likely to be missed by policymakers when examining how the transition to a zero-carbon economy will affect jobs.”

      So, while certain U.S. areas known for fossil-fuel production would certainly be affected — including west Texas, the Powder River Basin of Montana and Wyoming, parts of Appalachia, and more — a variety of industrial areas in the Great Plains and Midwest could see employment evolve as well.

      The paper, “Assessing the distribution of employment vulnerability to the energy transition using employment carbon footprints,” is published this week in Proceedings of the National Academy of Sciences. The authors are Kailin Graham, a master’s student in MIT’s Technology and Policy Program and graduate research assistant at MIT’s Center for Energy and Environmental Policy Research; and Knittel, who is the George P. Shultz Professor at MIT Sloan.

      “Our results are unique in that we cover close to the entire U.S. economy and consider the impacts on places that produce fossil fuels but also on places that consume a lot of coal, oil, or natural gas for energy,” says Graham. “This approach gives us a much more complete picture of where communities might be affected and how support should be targeted.”

      Adjusting the targets

      The current study stems from prior research Knittel has conducted, measuring carbon footprints at the household level across the U.S. The new project takes a conceptually related approach, but for jobs in a given county. To conduct the study, the researchers used several data sources measuring energy consumption by businesses, as well as detailed employment data from the U.S. Census Bureau.

      The study takes advantage of changes in energy supply and demand over time to estimate how strongly a full range of jobs, not just those in energy production, are linked to use of fossil fuels. The sectors accounted for in the study comprise 86 percent of U.S. employment, and 94 percent of U.S. emissions apart from the transportation sector.

      The Inflation Reduction Act, passed by Congress and signed into law by President Joe Biden in August 2022, is the first federal legislation seeking to provide an economic buffer for places affected by the transition away from fossil fuels. The act provides expanded tax credits for economic projects located in “energy community” areas — defined largely as places with high fossil-fuel industry employment or tax revenue and with high unemployment. Areas with recently closed or downsized coal mines or power plants also qualify.

      Graham and Knittel measured the “employment carbon footprint” (ECF) of each county in the U.S., producing new results. Out of more than 3,000 counties in the U.S., the researchers found that 124 are at the 90th percentile or above in ECF terms, while not qualifying for Inflation Reduction Act assistance. Another 79 counties are eligible for Inflation Reduction Act assistance, while being in the bottom 20 percent nationally in ECF terms.

      Those may not seem like colossal differences, but the findings identify real communities potentially being left out of federal policy, and highlight the need for new targeting of such programs. The research by Graham and Knittel offers a precise way to assess the industrial composition of U.S. counties, potentially helping to target economic assistance programs.

      “The impact on jobs of the energy transition is not just going to be where oil and natural gas are drilled, it’s going to be all the way up and down the value chain of things we make in the U.S.,” Knittel says. “That’s a more extensive, but still focused, problem.”

      Graham adds: “It’s important that policymakers understand these economy-wide employment impacts. Our aim in providing these data is to help policymakers incorporate these considerations into future policies like the Inflation Reduction Act.”

      Adapting policy

      Graham and Knittel are still evaluating what the best policy measures might be to help places in the U.S. adapt to a move away from fossil fuels.

      “What we haven’t necessarily closed the loop on is the right way to build a policy that takes account of these factors,” Knittel says. “The Inflation Reduction Act is the first policy to think about a [fair] energy transition because it has these subsidies for energy-dependent counties.” But given enough political backing, there may be room for additional policy measures in this area.

      One thing clearly showing through in the study’s data is that many U.S. counties are in a variety of situations, so there may be no one-size-fits-all approach to encouraging economic growth while making a switch to clean energy. What suits west Texas or Wyoming best may not work for more manufacturing-based local economies. And even among primary energy-production areas, there may be distinctions, among those drilling for oil or natural gas and those producing coal, based on the particular economics of those fuels. The study includes in-depth data about each county, characterizing its industrial portfolio, which may help tailor approaches to a range of economic situations.

      “The next step is using this data more specifically to design policies to protect these communities,” Knittel says. More

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      in Environment

      How to tackle the global deforestation crisis

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      Imagine if France, Germany, and Spain were completely blanketed in forests — and then all those trees were quickly chopped down. That’s nearly the amount of deforestation that occurred globally between 2001 and 2020, with profound consequences.

      Deforestation is a major contributor to climate change, producing between 6 and 17 percent of global greenhouse gas emissions, according to a 2009 study. Meanwhile, because trees also absorb carbon dioxide, removing it from the atmosphere, they help keep the Earth cooler. And climate change aside, forests protect biodiversity.

      “Climate change and biodiversity make this a global problem, not a local problem,” says MIT economist Ben Olken. “Deciding to cut down trees or not has huge implications for the world.”

      But deforestation is often financially profitable, so it continues at a rapid rate. Researchers can now measure this trend closely: In the last quarter-century, satellite-based technology has led to a paradigm change in charting deforestation. New deforestation datasets, based on the Landsat satellites, for instance, track forest change since 2000 with resolution at 30 meters, while many other products now offer frequent imaging at close resolution.

      “Part of this revolution in measurement is accuracy, and the other part is coverage,” says Clare Balboni, an assistant professor of economics at the London School of Economics (LSE). “On-site observation is very expensive and logistically challenging, and you’re talking about case studies. These satellite-based data sets just open up opportunities to see deforestation at scale, systematically, across the globe.”

      Balboni and Olken have now helped write a new paper providing a road map for thinking about this crisis. The open-access article, “The Economics of Tropical Deforestation,” appears this month in the Annual Review of Economics. The co-authors are Balboni, a former MIT faculty member; Aaron Berman, a PhD candidate in MIT’s Department of Economics; Robin Burgess, an LSE professor; and Olken, MIT’s Jane Berkowitz Carlton and Dennis William Carlton Professor of Microeconomics. Balboni and Olken have also conducted primary research in this area, along with Burgess.

      So, how can the world tackle deforestation? It starts with understanding the problem.

      Replacing forests with farms

      Several decades ago, some thinkers, including the famous MIT economist Paul Samuelson in the 1970s, built models to study forests as a renewable resource; Samuelson calculated the “maximum sustained yield” at which a forest could be cleared while being regrown. These frameworks were designed to think about tree farms or the U.S. national forest system, where a fraction of trees would be cut each year, and then new trees would be grown over time to take their place.

      But deforestation today, particularly in tropical areas, often looks very different, and forest regeneration is not common.

      Indeed, as Balboni and Olken emphasize, deforestation is now rampant partly because the profits from chopping down trees come not just from timber, but from replacing forests with agriculture. In Brazil, deforestation has increased along with agricultural prices; in Indonesia, clearing trees accelerated as the global price of palm oil went up, leading companies to replace forests with palm tree orchards.

      All this tree-clearing creates a familiar situation: The globally shared costs of climate change from deforestation are “externalities,” as economists say, imposed on everyone else by the people removing forest land. It is akin to a company that pollutes into a river, affecting the water quality of residents.

      “Economics has changed the way it thinks about this over the last 50 years, and two things are central,” Olken says. “The relevance of global externalities is very important, and the conceptualization of alternate land uses is very important.” This also means traditional forest-management guidance about regrowth is not enough. With the economic dynamics in mind, which policies might work, and why?

      The search for solutions

      As Balboni and Olken note, economists often recommend “Pigouvian” taxes (named after the British economist Arthur Pigou) in these cases, levied against people imposing externalities on others. And yet, it can be hard to identify who is doing the deforesting.

      Instead of taxing people for clearing forests, governments can pay people to keep forests intact. The UN uses Payments for Environmental Services (PES) as part of its REDD+ (Reducing Emissions from Deforestation and forest Degradation) program. However, it is similarly tough to identify the optimal landowners to subsidize, and these payments may not match the quick cash-in of deforestation. A 2017 study in Uganda showed PES reduced deforestation somewhat; a 2022 study in Indonesia found no reduction; another 2022 study, in Brazil, showed again that some forest protection resulted.

      “There’s mixed evidence from many of these [studies],” Balboni says. These policies, she notes, must reach people who would otherwise clear forests, and a key question is, “How can we assess their success compared to what would have happened anyway?”

      Some places have tried cash transfer programs for larger populations. In Indonesia, a 2020 study found such subsidies reduced deforestation near villages by 30 percent. But in Mexico, a similar program meant more people could afford milk and meat, again creating demand for more agriculture and thus leading to more forest-clearing.

      At this point, it might seem that laws simply banning deforestation in key areas would work best — indeed, about 16 percent of the world’s land overall is protected in some way. Yet the dynamics of protection are tricky. Even with protected areas in place, there is still “leakage” of deforestation into other regions. 

      Still more approaches exist, including “nonstate agreements,” such as the Amazon Soy Moratorium in Brazil, in which grain traders pledged not to buy soy from deforested lands, and reduced deforestation without “leakage.”

      Also, intriguingly, a 2008 policy change in the Brazilian Amazon made agricultural credit harder to obtain by requiring recipients to comply with environmental and land registration rules. The result? Deforestation dropped by up to 60 percent over nearly a decade. 

      Politics and pulp

      Overall, Balboni and Olken observe, beyond “externalities,” two major challenges exist. One, it is often unclear who holds property rights in forests. In these circumstances, deforestation seems to increase. Two, deforestation is subject to political battles.

      For instance, as economist Bard Harstad of Stanford University has observed, environmental lobbying is asymmetric. Balboni and Olken write: “The conservationist lobby must pay the government in perpetuity … while the deforestation-oriented lobby need pay only once to deforest in the present.” And political instability leads to more deforestation because “the current administration places lower value on future conservation payments.”

      Even so, national political measures can work. In the Amazon from 2001 to 2005, Brazilian deforestation rates were three to four times higher than on similar land across the border, but that imbalance vanished once the country passed conservation measures in 2006. However, deforestation ramped up again after a 2014 change in government. Looking at particular monitoring approaches, a study of Brazil’s satellite-based Real-Time System for Detection of Deforestation (DETER), launched in 2004, suggests that a 50 percent annual increase in its use in municipalities created a 25 percent reduction in deforestation from 2006 to 2016.

      How precisely politics matters may depend on the context. In a 2021 paper, Balboni and Olken (with three colleagues) found that deforestation actually decreased around elections in Indonesia. Conversely, in Brazil, one study found that deforestation rates were 8 to 10 percent higher where mayors were running for re-election between 2002 and 2012, suggesting incumbents had deforestation industry support.

      “The research there is aiming to understand what the political economy drivers are,” Olken says, “with the idea that if you understand those things, reform in those countries is more likely.”

      Looking ahead, Balboni and Olken also suggest that new research estimating the value of intact forest land intact could influence public debates. And while many scholars have studied deforestation in Brazil and Indonesia, fewer have examined the Democratic Republic of Congo, another deforestation leader, and sub-Saharan Africa.

      Deforestation is an ongoing crisis. But thanks to satellites and many recent studies, experts know vastly more about the problem than they did a decade or two ago, and with an economics toolkit, can evaluate the incentives and dynamics at play.

      “To the extent that there’s ambuiguity across different contexts with different findings, part of the point of our review piece is to draw out common themes — the important considerations in determining which policy levers can [work] in different circumstances,” Balboni says. “That’s a fast-evolving area. We don’t have all the answers, but part of the process is bringing together growing evidence about [everything] that affects how successful those choices can be.” More

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      in Environment

      New clean air and water labs to bring together researchers, policymakers to find climate solutions

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      MIT’s Abdul Latif Jameel Poverty Action Lab (J-PAL) is launching the Clean Air and Water Labs, with support from Community Jameel, to generate evidence-based solutions aimed at increasing access to clean air and water.

      Led by J-PAL’s Africa, Middle East and North Africa (MENA), and South Asia regional offices, the labs will partner with government agencies to bring together researchers and policymakers in areas where impactful clean air and water solutions are most urgently needed.

      Together, the labs aim to improve clean air and water access by informing the scaling of evidence-based policies and decisions of city, state, and national governments that serve nearly 260 million people combined.

      The Clean Air and Water Labs expand the work of J-PAL’s King Climate Action Initiative, building on the foundational support of King Philanthropies, which significantly expanded J-PAL’s work at the nexus of climate change and poverty alleviation worldwide. 

      Air pollution, water scarcity and the need for evidence 

      Africa, MENA, and South Asia are on the front lines of global air and water crises. 

      “There is no time to waste investing in solutions that do not achieve their desired effects,” says Iqbal Dhaliwal, global executive director of J-PAL. “By co-generating rigorous real-world evidence with researchers, policymakers can have the information they need to dedicate resources to scaling up solutions that have been shown to be effective.”

      In India, about 75 percent of households did not have drinking water on premises in 2018. In MENA, nearly 90 percent of children live in areas facing high or extreme water stress. Across Africa, almost 400 million people lack access to safe drinking water. 

      Simultaneously, air pollution is one of the greatest threats to human health globally. In India, extraordinary levels of air pollution are shortening the average life expectancy by five years. In Africa, rising indoor and ambient air pollution contributed to 1.1 million premature deaths in 2019. 

      There is increasing urgency to find high-impact and cost-effective solutions to the worsening threats to human health and resources caused by climate change. However, data and evidence on potential solutions are limited.

      Fostering collaboration to generate policy-relevant evidence 

      The Clean Air and Water Labs will foster deep collaboration between government stakeholders, J-PAL regional offices, and researchers in the J-PAL network. 

      Through the labs, J-PAL will work with policymakers to:

      co-diagnose the most pressing air and water challenges and opportunities for policy innovation;
      expand policymakers’ access to and use of high-quality air and water data;
      co-design potential solutions informed by existing evidence;
      co-generate evidence on promising solutions through rigorous evaluation, leveraging existing and new data sources; and
      support scaling of air and water policies and programs that are found to be effective through evaluation. 
      A research and scaling fund for each lab will prioritize resources for co-generated pilot studies, randomized evaluations, and scaling projects. 

      The labs will also collaborate with C40 Cities, a global network of mayors of the world’s leading cities that are united in action to confront the climate crisis, to share policy-relevant evidence and identify opportunities for potential new connections and research opportunities within India and across Africa.

      This model aims to strengthen the use of evidence in decision-making to ensure solutions are highly effective and to guide research to answer policymakers’ most urgent questions. J-PAL Africa, MENA, and South Asia’s strong on-the-ground presence will further bridge research and policy work by anchoring activities within local contexts. 

      “Communities across the world continue to face challenges in accessing clean air and water, a threat to human safety that has only been exacerbated by the climate crisis, along with rising temperatures and other hazards,” says George Richards, director of Community Jameel. “Through our collaboration with J-PAL and C40 in creating climate policy labs embedded in city, state, and national governments in Africa and South Asia, we are committed to innovative and science-based approaches that can help hundreds of millions of people enjoy healthier lives.”

      J-PAL Africa, MENA, and South Asia will formally launch Clean Air and Water Labs with government partners over the coming months. J-PAL is housed in the MIT Department of Economics, within the School of Humanities, Arts, and Social Sciences. More

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      in Energy

      MIT junior Anushree Chaudhuri named 2023 Udall Scholar

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      MIT junior Anushree Chaudhuri has been selected as a 2023 Morris K. Udall and Stewart L. Udall Foundation Scholar. She is only the second MIT student to win this award and the first winner since 2008.

      The Udall Scholarship honors students who have demonstrated a commitment to the environment, Native American health care, or tribal public policy. Chaudhuri is one of 55 Udall Scholars selected nationally out of 384 nominated applicants.

      Chaudhuri, who hails from San Diego, studies urban studies and planning as well as economics at MIT. She plans to work across the public and private sectors to drive structural changes that connect the climate crisis to local issues and inequities. Chaudhuri has conducted research with the MIT Environmental Solutions Initiative Rapid Response Group, which develops science-based analysis on critical environmental issues for community partners in civil society, government, and industry.

      Throughout her sophomore year, Chaudhuri worked with MIT’s Office of Sustainability, creating data visualizations for travel and Scope 3 emissions as a resource for MIT departments, labs, and centers. As an MIT Washington intern at the U.S. Department of Energy, she also developed the Buildings Upgrade Equity Tool to assist local governments in identifying areas for decarbonization investments.

      While taking Bruno Verdini’s class 11.011 (Art and Science of Negotiation) in fall 2021, Chaudhuri became deeply interested in the field of dispute resolution as a way of engaging diverse stakeholders in collaborative problem-solving, and she began work with Professor Lawrence Susskind at the MIT Science Impact Collaborative. She has now completed multiple projects with the group, as part of the MIT Renewable Energy Siting Clinic, including creating qualitative case studies to inform mediated siting processes and developing an open-access website and database for 60 renewable energy siting conflicts from findings published in Energy Policy. Through the MIT Climate and Sustainability Consortium’s Climate Scholars Program and a DUSP-PKG Fellowship, she is conducting an ethnographic and econometric study on the energy justice impacts of clean infrastructure on local communities.

      As part of a yearlong campaign to revise MIT’s Fast Forward Climate Action Plan, Chaudhuri led the Investments Student Working Group, which advocated for institutional social responsibility and active engagement in the Climate Action 100+ investor coalition. She also served as chair of the Undergraduate Association Committee on Sustainability and co-leads the Student Sustainability Coalition. Her work led her to be selected by MIT as an undergraduate delegate to the U.N. Framework Convention on Climate Change Summit (COP27).

      Chaudhuri’s research experiences and leadership in campus sustainability organizations have strengthened her belief in deep community engagement as a catalyst for change. By taking an interdisciplinary approach that combines law, planning, conflict resolution, participatory research, and data science, she’s committed to a public service career creating policies that are human-centered and address climate injustices, creating co-benefits for diverse communities. More

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      in Environment

      MIT Center for Real Estate advances climate and sustainable real estate research agenda

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      Real estate investors are increasingly putting sustainability at the center of their decision-making processes, given the close association between climate risk and real estate assets, both of which are location-based.

      This growing emphasis comes at a time when the real estate industry is one of the biggest contributors to global warming; its embodied and operational carbon accounts for more than one-third of total carbon emissions. More stringent building decarbonization regulations are putting pressure on real estate owners and investors, who must invest heavily to retrofit their buildings or pay “carbon penalties” and see their assets lose value.

      The impacts of acute and chronic climate risks — flooding, hurricanes, wildfires, droughts, sea-level rise, and extreme weather — are becoming more salient. Action across all areas of the real estate sector will be required to limit the social and economic risks arising from the climate crisis. But what business and policy levers are most effective at guiding the industry toward a more sustainable future?

      The MIT Center for Real Estate (MIT/CRE) believes that the real estate industry can be a catalyst for the rapid mobilization of a global transition to a greener society. Since its inception in 1983, MIT/CRE has focused on the physical aspect of real estate, especially the development industry, and how the built environment gets produced and changed.

      “The real estate industry is now at the critical moment to address the climate crisis. That is why our center initiated this major research agenda on climate and real estate two years ago,” says William Wheaton, a former director of MIT/CRE and professor emeritus in MIT’s Department of Economics, who is leading a research project on the impact of flood risks in real estate markets.

      Producing high-quality research to support climate actions

      The work of scientists and practitioners responding to the climate crisis is often bifurcated into mitigation or adaptation responses. Mitigation seeks to reduce the severity of the climate crisis by addressing emissions, while adaptation efforts seek to anticipate the most severe effects of the crisis and minimize potential risks to people and the built environment.

      The fundamental nature of the real estate industry — location-based and capital-intensive — enables potential meaningful action for both mitigation and adaptation interventions. Exploring both avenues, MIT/CRE faculty and researchers have published academic papers exploring how chronic climate events such as extreme temperatures lower people’s expressed happiness and also disrupt habits of daily life; and how acute climate events such as hurricanes damage the built environment and decrease the financial value of real estate.

      “This ongoing research production centers on industry’s imperative to take action quickly, the real losses resulting from inaction, and the potential social and business value creation for early adopters of more sustainable practices,” says Siqi Zheng, a co-author of those papers, who is the MIT/CRE faculty director and the STL Champion Professor of Urban and Real Estate Sustainability.

      Building a global community of academics and industry leaders

      In addition to sponsoring research and related courses, MIT/CRE has created a global network of researchers and industry leaders, centered around sharing ideas and experience to quickly scale more sustainable practices, such as building decarbonization and circular economy in real estate, as well as climate risk modeling and pricing. Collaborating with industry leaders from the investment and real estate sector, such as EY, Veris Residential, Moody’s Analytics, Colliers, Finvest, KPF, Taurus Investment Holdings, Climate Alpha, and CRE alumnus Paul Clayton SM ’02, MIT/CRE blends real-world experiences and questions with applied data and projects to create a “living lab” for MIT/CRE researchers to conduct climate research.

      At an inaugural symposium on climate and real estate held at MIT in December 2022, more than a dozen scholars presented papers on the intersection of real estate and sustainability, which will form the basis of a special issue on climate change and real estate in the Journal of Regional Science. A “fireside chat” connected scholars and industry leaders in practical conversations about how to use research to aid practitioners.

      “Dissemination of research is critical to the success of our efforts to address climate change in the real estate industry,” says David Geltner, post-tenure professor of real estate finance and former director of  MIT/CRE, whose research group is working on climate risks and commercial real estate. “If we produce excellent research but it is cloistered in academic journals, it does no one any good. Similarly, if we do not work with collaborators to focus our research, we run the risk of investigating levers to reduce emissions that are of no use to practitioners.”

      Juan Palacios, coordinator of MIT/CRE’s climate and real estate research team, emphasizes that industry collaboration creates a two-way sharing of information that refines how research is being conducted at the center and ensures that it has positive impact.

      “More and more real estate investors and market players are putting sustainability at the center of their investment approach,” says Zheng. “A broad range of stakeholders (investors, regulators, insurers, and the public) have started to understand that long-term profitability cannot be achieved without embracing multiple dimensions of sustainability such as climate, wealth inequality, public health, and social welfare. Because of its unique relationship with industry collaborators and its place in the MIT innovation ecosystem, MIT/CRE has a responsibility and the opportunity to champion multiple pathways toward greater sustainability in the real estate industry.” More