Environment

FSI scholars approach their research on the environment from regulatory, economic and societal angles. The Center on Food Security and the Environment weighs the connection between climate change and agriculture; the impact of biofuel expansion on land and food supply; how to increase crop yields without expanding agricultural lands; and the trends in aquaculture. FSE’s research spans the globe – from the potential of smallholder irrigation to reduce hunger and improve development in sub-Saharan Africa to the devastation of drought on Iowa farms. David Lobell, a senior fellow at FSI and a recipient of a MacArthur “genius” grant, has looked at the impacts of increasing wheat and corn crops in Africa, South Asia, Mexico and the United States; and has studied the effects of extreme heat on the world’s staple crops.

Food insecurity remains a critical issue across much of sub-Saharan Africa. In certain parts of the region, fish is sometimes the most accessible or affordable source of animal protein. Yet many wild fish stocks are threatened or in decline, and Africa is the only continent in which per capita fish supply is decreasing. To ward off future supply shortfalls, regional governments are investing in their aquaculture (fish farming) sectors using a variety of policy tools, including fish feed subsidies.

Extreme weather events and climate variability threaten crop production, food prices, food security, and human lives at local and global scales. Ten years ago, a record heat wave killed over 30,000 people and seriously damaged crop yields in France and northern Italy; summertime heat waves and associated droughts have subsequently decimated maize and soy yields in the U.S. and wheat yields in Russia, causing global food prices to soar.

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Research Affiliate at PESD
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Ognen Stojanovski has been affiliated with PESD since 2005 (while still a student at Stanford Law School) and returned to the program in 2012. He is charged with leading PESD’s research platform on low-income energy services, which studies the kinds of economic and institutional arrangements that can deliver modern energy services to the poor at scale and in a durable way (as opposed to whether a specific technology can be made to work on a one-off basis).

His current research focuses on measuring and quantifying the economic and social welfare impacts of solar PV products in developing countries, as well as identifying innovations in the off-grid solar industry that can improve business performance and maximize end-user benefits. He is also keenly interested in investigating the theory and practice of impact investing in social enterprises intended to both promote development and deliver financial returns. Stojanovski was previously part of PESD's research on national oil companies and authored the chapter on Pemex and the Mexican oil sector in the book Oil and Governance: State-owned Enterprises and the World Energy Supply.

Stojanovski has designed and carried out multiple randomized controlled trials (RCTs) and other field research projects in challenging environments. He has also been responsible for developing and maintaining relationships with both commercial and research partners that have enabled PESD to perform effective research in these settings. He authored successful research grant proposals to support this work.

Stojanovski developed the curriculum for Economics 121: “Social Science Field Research Methods,” a new course he has co-taught (along with Frank Wolak and Mark Thurber) since 2015. The course aims to equip students with strong foundations in research design and rigorous data analysis, along with the practical skills required for successful fieldwork implementation and project management. In the summer of 2015, he organized and led a group of selected students from the course to conduct an RCT in Puebla, Mexico. They explored how households use electricity and tested whether information about electricity pricing and conservation leads to changes in behavior.

Stojanovski’s research at the nexus of energy and development is motivated and informed by working, living, and traveling through over 20 developing countries in sub-Saharan Africa, central and eastern Europe, and South America for four years (October 2007-October 2011).

Additionally, Stojanovski has extensive experience in the autonomous vehicles industry, starting as a competitor in the first DARPA Grand Challenge while in graduate school in 2003-04. Most recently, he helped launch Otto (a startup later acquired by Uber) where he spearheaded policy, internal research, and external advocacy efforts. He developed the company’s policy position and compiled research probing the potential safety, fuel-efficiency, greenhouse gas emissions, and productivity benefits of self-driving commercial motor vehicles. He also organized and led a team undertaking a detailed econometric analysis on the possible impacts of this technology on the trucking labor market (available here).

Stojanovski has worked closely with policymakers, regulators and law enforcement at the federal, state, and international levels to develop and implement autonomous vehicle policies. He cleared a regulatory path forward for major milestones, including: (1) the first-ever commercial delivery by an autonomous truck ; (2) the first series of interstate shipments by (SAE level 2) self-driving trucks; and (3) the first framework for the development and testing of self-driving trucks in California. Stojanovski continues to actively advise on policy and legal issues related to autonomous vehicles.

Stojanovski has a background is in law and engineering. He received his J.D. from Stanford (with distinction) and also holds masters and bachelor’s degrees from UC Berkeley in Industrial Engineering and Operations Research (with highest honors). He is an active member of the State Bar of California and has advised clients on a wide range of corporate legal issues.

 

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Political Science professors Kenneth Scheve (Stanford) and Michael Bechtel's (University of Gallen) article on global climate agreements looks at how costs and distribution, participation, and enforcement affects the public support needed to sustain international efforts over the long run.

For a full synopsis and a PDF of the complete article, please visit the publication website by clicking on the article title below.

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Corporate Affiliate Visiting Fellow
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Chunquan Liu is a corporate affiliate visiting fellow with the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) for 2013-14.  He has over 20 years of work experience in China's energy industry.  In 2005, he established the Beijing Petrochemical Engineering Company (BPEC), which later became part of the Yanchang Petroleum Group Company (YCPC) in 2010.   As the engineering and technology subsidiary of YCPC, BPEC plays an important role in the group's strategic plan, new technology development and innovation, engineering design, and project mangement.  Currently, he serves as the CEO of BPEC.

While at Shorenstein APARC, Liu will research 1) international advanced technology, know-how and best practices; 2) how to find the right solution integrated with heavy oil, coal and gas suitable for China's energy structure and situation; and 3) how to make the significant improvement on the energy efficiency and emission reduction.

Liu received his bachelor's degree from China Petroleum University, his master's degree (EMBA) from Peking University and his master's degree in environmental technology from Tsinghua University.

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Corporate Affiliate Visiting Fellow, 2013-14
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Guangmu Liu is a corporate affiliate visiting fellow at the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) for 2013-14.  He has worked at BoHai Drilling Company (BHDC), a subsidiary company of China National Petroleum Company (CNPC) for 22 years.  His positions included the vice manager of the second drilling company and general manager of the number one drilling company, and most recently, he was responsible for the overseas market.  Currently, he serves as the assistant president of BHDC.  Liu received his bachelor's degree from the University of Geology of Chengdu and his master's degree in the oil and gas field from JiangHan Petroleum University.

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This paper summarizes the lessons learned from implementing a realistic, game-based simulation of California’s electricity market with a cap-and-trade market for greenhouse gas (GHG) emissions and fixed-price forward financial contracts for energy. Sophisticated market participants competed to maximize their returns under stressed (high carbon price) market conditions. Our simulation exhibited volatile carbon prices that could be influenced by strategic behavior of market participants. General uncertainty around carbon price as well as the deployment of strategies that were privately profitable but adversely affected overall market efficiency resulted in total costs of electricity supply that were significantly higher than would have been observed in perfectly competitive allowance and electricity markets. 

We observed several striking phenomena in our game. First, all teams in our game found themselves in a position to prefer higher carbon prices, even those holding high-emitting power plants. This occurred both because electricity price rose faster with carbon price than the average variable cost of producing output for most teams and because the initial allowance allocations functioned as “free money” with a face value that could be increased through the unilateral actions of market participants. Second, teams exercised unilateral market power on both selling and buying sides of the carbon allowance market, with the net effect being a carbon price far above that which would have been expected based on allowance supply and demand in a perfectly competitive market. Third, disagreement among teams over the appropriate price of carbon allowances combined with the exercise of unilateral market power in both electricity and allowance markets dramatically increased electricity prices and often resulted in the use of a more expensive set of generation units to produce the electricity demanded.  Numerous authors have pointed out that electricity markets are extremely susceptible to the exercise of market power, and emissions allowance markets can exacerbate this problem, as demonstrated in Kolstad and Wolak (2008). Fourth, there was very little liquidity in the secondary market for carbon allowances until right before the final emissions “true-up,” with a flurry of trading at the last minute, which resulted in inefficient market outcomes as several trades failed to be completed before the deadline.

These findings have several important policy implications. First, policy measures that increase the transparency and liquidity of the carbon allowance market would make both the allowance market and the electricity market work better. In our simulation, all market participants showed a strong unilateral desire to limit the amount of information publicly available about conditions in the carbon market, much to the detriment of market performance. Second, guardrails that constrain market outcomes, such as price floors and ceilings, can play a valuable role by limiting carbon price volatility.  Third, position and holding limits can reduce the ability and incentive of market participants to attempt strategies that, while privately profitable, have a negative impact on overall market efficiency.

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The Electricity Journal
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Mark C. Thurber
Frank Wolak
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Anthropogenic climate change has triggered impacts on natural and human systems world-wide, yet the formal scientific method of detection and attribution has been only insufficiently described. Detection and attribution of impacts of climate change is a fundamentally cross-disciplinary issue, involving concepts, terms, and standards spanning the varied requirements of the various disciplines. Key problems for current assessments include the limited availability of long-term observations, the limited knowledge on processes and mechanisms involved in changing environmental systems, and the widely different concepts applied in the scientific literature. In order to facilitate current and future assessments, this paper describes the current conceptual framework of the field and outlines a number of conceptual challenges. Based on this, it proposes workable cross-disciplinary definitions, concepts, and standards. The paper is specifically intended to serve as a baseline for continued development of a consistent cross-disciplinary framework that will facilitate integrated assessment of the detection and attribution of climate change impacts.

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Climate Change
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David Lobell
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I was honored and humbled to be asked to serve as a discussant for this final leg of the Gates Symposium Series, and in particular to have the opportunity to share the discussion with John Briscoe. The goal of this series is to understand how lessons from other times and places might inform an effective and sustainable effort to eliminate food insecurity in sub-Saharan Africa (SSA) – the one region in the world where widespread lack of access to sufficient food is still deeply entrenched. Moreover, this series has focused on and featured speakers with extensive on-the-ground work. In these regards, with his multidisciplinary work in many different countries in numerous positions, John is the ideal person to address issue the of water- and food- security connections in SSA. 

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A new study published today in the Proceedings of the National Academy of Sciences by FSE researchers finds smallholder irrigation has great potential to reduce hunger, raise incomes, and improve development prospects in an area of the world greatly in need of these advancements.

But even the cheapest pumps can still be prohibitively expensive without financing.

Distributed irrigation systems are those in which the water access (via pump or human power), distribution (furrow, watering can, sprinkler, drip lines, etc.), and use all occur at or near the same location.

These systems have the potential to use water more productively, improve nutritional outcomes and rural development, and narrow the income disparities that permit widespread hunger to persist despite economic advancement.

Only 4 percent of agricultural land in sub-Saharan Africa is currently irrigated. 

"Success stories can be found where distributed systems are used in a cooperative setting, permitting the sharing of knowledge, risk, credit and marketing as we've seen in our solar market garden project in Benin," said lead author Jennifer Burney

Moving forward development communities and sub-Saharan African governments need a better understanding of present water resources and how they will be affected by climate change.

"Farmers need access to financial services—credit and insurance—appropriate for a range of production systems," said co-author Rosamond L. Naylor. "Investments should start at a smaller scale, with thorough project evaluation, before scaling up."

FSE continues to contribute to these evaluations and added eight new villages to our project in Benin last year.

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