Time: 3:00 pm – 4:30 pm, Monday, May 13, 2024

Venue: IB 1051

Speaker: Jing Cao, Associate Professor of Economics at Tsinghua University

Host: Jingbo Cui, Associate Professor of Applied Economics at DKU

Bio:  Jing Cao, Associate Professor of Economics in the School of Economics and Management at Tsinghua University, Deputy Director of Climate Regulation and Carbon Finance Center of Institute for Carbon Neutrality Tsinghua University. She was awarded the 2014 Excellent Youth NSFC funding on “Environmental Economics and Policy” in China. Her research focus on Environmental Economics, Energy Economics, Climate Change Policy Modeling Analysis. She has published many papers on Management Science, Journal of Public Economics, Journal of Development Economics, Journal of the Association of Environmental and Resource Economists, Environmental and Resource Economics, Energy Economics, the Energy Journal, Environmental Science & Technology, Nature Sustainability and etc. She has won McKinsey China Economics Award in 2010, Gregory Chow Best Paper Award in 2005 and Best Paper Award for East Asian Economic Association Conference in 2004.

Abstract: This paper provides an in-depth analysis of a targeted solar subsidy initiative in rural China, designed with the specific goal of enhancing the living conditions in the poorest regions. By adopting a novel strategy that circumvents the inherent regressivity of standard solar subsidies, this initiative carefully targets villages and households that exhibit critical necessity coupled with the capability for solar energy utilization. Applying methodologies like pairwise matching and synthetic difference-in-differences effectively mitigates selection biases and establishes suitable counterfactuals. The findings show substantial firm entry and an increase in nightlight intensity within the treated locales, indicating economic uplift. Furthermore, the initiative achieves a more equal distribution of economic benefits, effectively countering the regressive effects commonly associated with residential renewable energy subsidies. As a competitive channel, the program fosters a structural transition, driving a shift towards the formal sector and transforming farmland into built-up areas. By demonstrating the effectiveness of meticulously designed renewable energy subsidies, it sheds some light on the achievement of broad energy transition objectives, the advancement of social equality, and the improvement of economic inclusion.