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RESEARCH

JOB MARKET PAPER

Technology Adoption and Environmental Compliance in Electricity Generation: The Role of Organizational Experience

Abstract: This study investigates how organizational experience within multi-plant electricity firms influences compliance with environmental regulations, particularly in the realm of technology adoption. The paper presents a theoretical framework that conceptualizes technology adoption as a strategic choice shaped by operational uncertainty and learning dynamics. This framework posits that the impact of cross-plant experience —defined as the number of peer units within the same organization that have adopted a specific technology— on adoption rates varies according to the level of baseline uncertainty on how to manage the technology. The empirical analysis utilizes data from 1,475 generating units spanning 1998 to 2020 to test this hypothesis by examining the diffusion of multiple technologies characterized by heterogeneous levels of operational uncertainty. The analysis specifically focuses on compliance with the U.S. Ozone Transport Rules, which aim to curb regional ozone transport by limiting NOx emissions. Employing a difference-in-differences approach, the study leverages the staggered roll-out of these rules to estimate the heterogeneous responses across both technology types and levels of cross-plant experience, while controlling for persistent factors that might bias the results. The findings indicate that firms with extensive cross-plant experience are more likely to adopt new and uncertain technologies, whereas the adoption of established technologies shows less dependence on cross-plant experience. These results bolster the theoretical framework, underscoring the significant role of learning spillovers in shaping compliance strategies and driving technological innovation amid uncertainty. Furthermore, these findings highlight potential challenges in environmental policy design due to path-dependent behavior. The concluding discussion emphasizes the need for future research to explore organizational competency traps and inertia that may hinder the effectiveness of such policies.

Presented at:

Sustainable Development Colloquium, Columbia University - Year: 2021, 2022, 2023

WORKING PAPERS

10 Years After: Long-term Adoption of Electricity in Rural Rwanda

(with L. Masselus, J. Ankel-Peters, V. Modi, J. Mugyenyi, A. Munyehirwe, N. Williams and M. Sievert) - Ruhr Economic Papers, No. 1086 Submitted to Nature Sustainability

Abstract:  Extending the power grid into hitherto unconnected areas is high on the policy agenda in Sub-Saharan Africa. Yet, connection rates and electricity consumption remain low in grid connected areas, at least in the short and medium run. This paper provides a long-term follow-up on an evaluation of a large-scale grid extension program in rural Rwanda. We study the adoption of grid electricity over time using a panel of 41 communities that were electrified up to ten years ago. We find that connection rates for households living near the grid increased from 62% in 2013 to 82% in 2022. At the wider community level, connection rates are much lower, at 51%. Furthermore, electricity consumption levels and appliance usage are low and did not grow over time. We corroborate these findings with administrative consumption data from the utility customer data base. Our findings suggest that investments into grid-based rural electrification cannot be justified by economic development impacts and cost-benefit considerations.

Presented at:

  • Sustainable Energy Transitions Initiative (SETI) workshop at EAERE - Year: 2023 - Presenter: Lise Masselus

  • European Association of Environmental and Resource Economists (EAERE) Conference, Cyprus -Year: 2022 Presenter: Lise Masselus

  • Environment for Development (EfD) Annual Meeting, Kampala, Uganda - Year: 2022 Presenter: Lise Masselus

  • Energy & Development Research Group Seminar, Duke University - Year: 2022 - Presenter: Lise Masselus 

Electricity Consumption: The role of grid reliability in appliance ownership and usage in Rwanda 

(with Joel Mugyenyi and Vijay Modi) - CEEP Working Paper 33 Submitted to Energy Economics

Abstract: This study investigates household-level electricity consumption in Rwanda, focusing on the relationship between electricity reliability, residential appliance ownership and usage behaviors. Leveraging a unique dataset and employing instrumental variables for reliability, we explore how households adjust their appliance inventory in response to unreliable grid conditions. Our findings reveal that while electricity reliability affects the types of appliances owned, it does not significantly impact the total number of appliances. Specifically, unreliable electricity reduces, on average, the likelihood of owning low-consumption, affordable devices such as smartphones, TVs, and decoders. Higher-income households in areas with low reliability are more likely to invest in alternative appliances that are less dependent on the grid, such as music systems, while lower-income households tend to favor appliances like sewing machines. Furthermore, our analysis of the conditional electricity demand suggests that reliability has minimal impact on appliance usage among households already possessing appliances. Importantly, income emerges as a major barrier to both appliance ownership and usage. These results suggest that while electricity reliability is an important factor, its impact on residential electricity consumption is limited when affordability constraints due to low income are prominent. This study offers valuable insights for policymakers aiming to enhance residential electricity consumption in Sub-Saharan Africa, emphasizing the need to focus reliability interventions in higher-income areas to maximize benefits.

Presented at:

Research Symposium, 20th Columbia Africa Conference - Year: 2023 - Presenter: Joel Mugyenyi (Click for more information)

WORK IN PROGRESS

Evaluating Wind Integration and Carbon Taxes: Strategic Implications for the Northeastern USA 

(with Thomas Braun) 

Dynamic Spatial Incentives in Infrastructure Connection Tariffs: Evidence from Sub-Saharan Electrification 

(with Eugene Tan) 

Environmental Benefits of State Renewable Portfolio Standards: Mitigating Water Use in Power Generation

Learning from Experience and Market Deregulation: Impacts on Firm Behavior and Environmental Performance

Adopting New Technologies in Response to Extreme Whether Events: Implications for Industry Dynamics in US Electricity Markets

PUBLICATIONS
Conference Proceedings:

Energy Demand: A Study on Population Aging.

Proceedings of the XLIX Annual Meeting of the Argentinian Association of Political Economy, Argentina. ISSN: 1852-0022 ISBN: 978- 987-28590-1-5.

Other:

Climate and Electricity: How much do power outages cost?

(with Mariano Rabassa and Articles Guillermo Sabionni) - published on Foco Economico (online)​​

AFFILIATIONS
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