Affiliate Spotlight: Kelsey Jack

Today, in partnership with King Philanthropies, we announced the launch of the five-year $25 million King Climate Action Initiative (K-CAI) at J-PAL. The initiative will support innovative research and policy engagement to combat climate change and poverty around the world. 

While climate change affects everyone, its impacts are highly inequitable. It disproportionately harms people living in poverty, people of color, and people in low- and middle-income countries, who are more exposed to its negative impacts and often have fewer resources for adaptation. 

Climate change also threatens to reverse decades of progress in global poverty alleviation, continuing the disturbing trend of the COVID pandemic, with the World Bank estimating that climate change could push an additional 130 million people into poverty by 2030. 

J-PAL’s mission is to reduce poverty by ensuring that policy is informed by scientific evidence. The climate crisis threatens global progress on poverty, and is deeply in need of its own evidence revolution. 

While we have essential, substantial, and growing scientific evidence about how humans are changing Earth's climate and how climate change will affect our planet and societies, another important kind of evidence is lacking. In most cases, policymakers don’t have evidence on the impacts of potential climate solutions in the real world, often having to rely on projections of costs and benefits from desk- or lab-based studies. 

K-CAI is among the first major climate change initiatives dedicated to 1) generating evidence on the real-world impacts of potential climate solutions using cutting-edge randomized evaluations, 2) working with decision makers to translate evidence on effective solutions into large-scale action, and 3) identifying climate solutions that benefit people in poverty.  

Fighting climate change and poverty with evidence on potential solutions

K-CAI will support collaborations between researchers and leaders in government, NGOs, and the private sector to design, pilot, evaluate, and scale evidence-informed climate change solutions that reduce burdens on and increase opportunities for people living in poverty. 

Our research and policy agenda will focus on the four pillars of the global climate and energy challenge: 

• Mitigation: Reducing carbon emissions to slow the pace of climate change and its damaging effects;

• Pollution reduction: Reducing harmful carbon co-pollutants and thereby improving public health, without reducing critical access to energy;

• Adaptation: Building communities’ abilities to adapt to the economic, social, and environmental impacts of climate change, particularly in settings threatened by rising sea levels, changing rainfall, extreme weather, and shifting disease vectors, among others factors; and

• Energy access: Increasing access to affordable and reliable energy for low-income families and communities around the world, and shifting energy systems to cleaner sources.

Over the next 10 years, K-CAI aspires to improve the lives of at least 25 million people living in poverty, reduce carbon emissions and carbon co-pollutants equivalent to $125 million or more, and raise significant additional resources to build a movement for evidence-informed policy at the nexus of climate change and poverty.

Building a movement

K-CAI will accelerate and transform J-PAL’s work in climate change across our research network, all seven of our regional offices, and across our ten sector teams—work that has been ongoing since 2010. 

To date, J-PAL affiliated researchers have already evaluated more than forty innovative environment, energy, and climate programs in collaboration with policy partners in over a dozen countries, including off-grid solar, emissions trading schemes, better enforcement of existing regulation, residential and industrial energy efficiency programs, stress tolerant crops, social protection for climate change adaptation, and programs to reduce deforestation and agricultural burning. Effective innovations have been scaled by government partners in Chile and India, among others.  

Through K-CAI, our vision is to vastly expand this work to help build a movement of researchers and policymakers working toward evidence-informed policy to mitigate climate change and reduce poverty, similar to the movement that the J-PAL network and our many partners have helped build in global development.

Testing and scaling effective solutions 

K-CAI will take a two-track approach to inform climate policy, working together with leaders in government, NGOs, and the private sector, and with climate and social scientists around the world: 

1) Design, pilot, and evaluate innovations: In addition to testing promising policies and technologies in the real world using randomized evaluations, K-CAI will bring together leading researchers and implementers to test strategies to change behavior, address market failures, and improve the effectiveness of policy and regulation in the transition to low-carbon economies, recognizing that policy innovation is as critical as technological innovation in solving the climate crisis.

2) Scale effective solutions: K-CAI will catalyze the scaling of interventions that already have evidence of effectiveness by funding technical assistance to decision makers in government, NGOs, and the private sector. Under the initiative, we will build a cadre of fellows seconded to policy partners to implement evidence-informed climate and poverty solutions. 

Recognizing the need to dramatically reduce carbon emissions in the next decade to avoid the worst climate scenarios, K-CAI will work to speed up the path from research to policy. The initiative will prioritize funding evaluations that work to generate results more quickly, including by making use of satellite, sensor, and administrative data, and evaluations conducted in partnership with policymakers to scale effective solutions. 

K-CAI is chaired by J-PAL affiliated researchers Michael Greenstone (University of Chicago) and Kelsey Jack (University of California, Santa Barbara), who will shape the initiative’s research and policy agenda and provide academic leadership. Claire Walsh will serve as K-CAI’s first Project Director. 

K-CAI will issue its first call for proposals to J-PAL affiliated and invited researchers in early August 2020 and will announce the first funded research and scaling projects before the end of the year. 

We know we cannot achieve our ambitious goals alone. To learn more about partnership opportunities, please contact us at [email protected]. 

To stay informed about K-CAI’s work, sign up for the J-PAL newsletter and visit our new initiative page.

Christopher Knittel is the George P. Shultz Professor and a professor of applied economics at the MIT Sloan School of Management. In this J-PAL affiliate spotlight, Chris sheds light on the research questions he’s pursuing to inform policies on greenhouse gas emissions and carbon co-pollution reductions.

What first drew you to study economics, and why did you choose to focus much of your research around environmental economics and how firms and consumers respond to policies?

I expected to be a lawyer when I entered undergrad, but then I took my first economics class and fell in love with it. I was interested in firm behavior and consumer behavior around firms. My PhD work was in industrial organization. I was doing a lot of work on banking and finance, but when my son was born, I started worrying more about environmental issues. That drew me toward research on local pollution and climate change, and I’ve focused on this ever since.

What research questions are driving your current research agenda?

The overarching question driving my research is how consumers and firms respond to policies and changes in market conditions: whether this is energy prices or policies that impact prices, or policies more generally. I like to come full circle and ask what those responses mean for policy effectiveness and efficiency. I try to understand what firms and consumers do around the energy space and what products lead to pollution, and then write papers to help policymakers design better policies. We’ve focused on energy efficiency because that has been a bipartisan focus for many policymakers. Going forward, I hope that policymakers will enact broader measures around climate change. Much of my work aims to understand climate policies that aren’t on the map today but hopefully will be considered in the future.

What is an example of a randomized evaluation measuring the impact of an environmental or energy policy program that particularly resonated with you? Why did you choose to do this evaluation?

I am wrapping up a study on industrial energy efficiency. Energy efficiency policies have bipartisan support, and a lot of that work focuses on residential consumers—yet questions remain about commercial and industrial facilities and what the impacts of energy efficiency policies might be for them. Catherine Wolfram, Michael Greenstone, and I are finishing an experiment in California that outfitted one hundred industrial facilities with sub-metering. We measured how much energy the compressed air systems were using.

Compressed air might sound boring, but it’s an important consumer of electricity: twenty percent of industrial electricity is used by compressed air. We worked with large firms whose monthly electricity bills were tens of thousands of dollars. To conduct the study, we teamed up with a startup that installs sub-meters and uses data analytics to understand what’s going on. Sometimes, savings were as simple as a notification from the startup saying: “did you know your compressed air machines are running on the weekends, even though you’re not here on the weekends?” Right now, we’re analyzing the data. I don’t want to give away the results, but it’s one of the first experiments that I’m aware of in the industrial space, and we’re excited about this.

What have been some of the most meaningful results or outcomes of your work so far?

Hunt Allcott and I ran a randomized evaluation about how consumers think about fuel costs when buying a car. If you look at the cost-benefit analysis of fuel economy standards, it assumes consumers are myopic (shortsighted), and standards try to correct this. The belief that consumers make mistakes is often conventional wisdom among policymakers. The ideal evaluation to illuminate whether this is accurate would be randomizing loan rates and seeing whether consumers invest more in fuel economy when offered lower interest rate loans. Although we could not do that, we instead asked how consumers respond to information about fuel economy and costs. One reason why consumers might be myopic is if they don’t have such data easily available.

We teamed up with Ford and developed an iPad app about fuel economy and randomly assigned customers walking into seven dealerships across the country to either use the app or see some unrelated information. The app asked what car they drive, what they think gas prices will do in the future, and what car they’re considering. The app took that information and showed them what would happen if they switched to a more fuel efficient car. It translated savings into more tangible terms, such as how many iPads or pairs of jeans they could buy with that money. We then observed what cars those consumers bought.

The results showed that this information does not have an effect on purchases. This is consistent with the idea that consumers were already making accurate assessments of fuel savings, at least on average. We saw both overestimates and underestimates of fuel costs. On average, the information isn’t affecting them, although there is likely to be heterogeneity in these effects (variation in how the treatment affects people), and we were under-powered to test that.

How have your research findings been received and used by the non-academic community?

Questions about how consumers think about fuel economy and the best ways to decarbonize transportation are front and center in the minds of many firms and policymakers. I am fortunate to run a research center at MIT that connects with industrial affiliates and policymakers about research. I’ve heard this study cited in DC and Sacramento and have presented it to policymakers and the Auto Alliance. I think it is one more piece of information for an important policy question.

I think that policy in DC and Sacramento is like a huge boat that takes a long time to turn. The focus on fuel economy standards is going to take a long time to turn towards a focus on something like carbon taxes or alternative policies. I can’t say I’ve seen “the end result” of my work, but I think this work has at least made some policymakers question conventional wisdom, in terms of how consumers make decisions. On the margin, I think my work has helped move them away from what economists have found to be inefficient policies toward more efficient policies.