The article is titled The cost to households of a large electricity outage, and it is written by Haakon Vennemo, Orvika Rosnes and Andreas Skulstad.

A large electricity outage is costly for households both directly and indirectly. The direct cost is the disutility from lacking electricity at home. The indirect cost is the disutility from lacking access to infrastructure services that depend on electricity, such as internet and mobile phones, public transport, shops and restaurants. Using a sample of nearly 5000 Norwegian households we estimate the direct and indirect cost of an electricity outage. We find that the indirect cost adds about 50% to the direct cost: households' willingness to pay (WTP) for a major electricity outage that hits several infrastructure services is about 50% higher than their willingness to pay for an outage that hits only their home.

This information is important for investments in electricity networks. A high expected cost of outages indicates that additional investment into electricity reliability will be optimal.

The article is available here.

Martin Ørbeck of Vista Analyse recently presented a research paper at the annual conference organized by the European Association of Environmental and Resource Economists (EAERE). This year's conference was held in Rimini, Italy, from 28 June to 1 July.

He presented "Temporal Dynamics of Willingness-to-pay and Environmental Preferences: Oil spill prevention in the Oslo fjord", a research paper he has written in collaboration with the three co-authors Henrik Lindhjem, Gorm Kipperberg and Maria Loureiro. The paper investigates developments over time in willingness-to-pay and underlying preferences for the environment and ecosystem services, using data from a contingent valuation study conducted in both 2015 and 2020 on oil spill prevention in the Oslo fjord.

The research paper has not yet been finalized, but will be made available on Vista's website upon publication.

Andreas Skulstad, Haakon Vennemo and Orvika Rosnes of Vista Analyse have written an article that is published in the latest issue of Samfunnsøkonomen (no. 3, 2022). The article analyses benefits from establishing a new testing center for oil spill protection technology, that the Norwegian Coastal Agency is advocating for.

The article is available to read here.

Andreas Stranden Hoel-Holt and Kristin Mjølnerød have written their master's theses at Vista this spring. Andreas has investigated the effects of technology diffusion from rich to poor countries in an integrated assessment model (IAM). Kristin has studied changes from 2017 to 2020 in household willingness-to-pay to avoid power outages.

Both theses have now been defended in the oral exam with flying colours.

We congratulate Andreas and Kristin with completing their studies!

This master thesis written by Mina Mariussen and co-financed by Vista Analyse study the effect of drought on educational attainment in ten countries south of Sahara. Climate change will probably intensify drought in areas that already are dry. It is important for adaptation and mitigation to assess and understand the impact of drought. Using econometric methods this thesis estimates the impact of drought on educational attainment in Sub-Saharan Africa, using geocoded data on climate and households across a time span of seventy years.

Findings suggest that in the presence of drought, individuals attain around a quarter of a year less education, and the probability of having any education is reduced by roughly three percent. This effect is mainly driven by an adverse effect for females. This heterogeneous effect on genders seems to be reversed when comparing subsamples of those born in the 1950s and 1990s, indicating a shift in gender norms with regards to education across time. The thesis is part of Vista Analyses´ research program in environment and development.

Vista partner Orvika Rosnes has together with Brita Bye, Kevin R. Kashual and Hidemichi Yonezawa in Statistics Norway and Karen Turner by the Centre for Energy Policy at the University of Strathclyde published a ny reserach paper «The road to a low emission society: Costs of interacting climate regulations».

Transportation is one of the main contributors to greenhouse gas emissions. In Norway, emissions from transport make up around a third of total greenhouse gas emissions. Climate regulations on transportation are often a mix of sector-specific regulations and economy-wide measures (such as emission pricing). We analyze the costs of such overlapping climate regulations: the cap on domestic non-ETS emissions and the goal of all new cars for private households being electrical vehicles by 2030.

The analysis shows that welfare costs to achieve an emission target is tripled when climate policies overlap (compared to the same decrease in emissions achieved through a uniform price on emissions in 2030). To reach the goal of all new private cars being electrical by 2030, current lucrative policies for electrical vehicles must be considerably strengthened. Society in general will profit from a larger share of the decrease in greenhouse gas emissions being taken in other sectors, with not everyone buying electrical vehicles.

Steinar Strøm and Bjørnar Andreas Kvinge of Vista Analyse has together with Pernille Parmer, Helge Sandvig Thorsen og Inger Ubbe published an article in CESifo. The article is an empirical analysis of investments on the Norwegian Continental Shelf. The article extends on a project that Vista Analyse completed on behalf of the Norwegian Petroleum Directorate.

In this article we analyze which factors that have influenced investments on the Norwegian Continental Shelf. We have utilized data for all oil and gas fields from 1970 to 2016. We find a strong and statistically significant effect of lagged oil prices on investments. The estimated model performs very well compared to actual data, except for the years 2012-2015. This was a period with large oil price fluctuations, where investments in the periods when the price peaked may have been limited by supply-side capacity restrictions.

Read the article here.

With Ewelina Siwiec of Institute of Environmental Protection in Poland, Vista researchers Anne Erlandsen and Haakon Vennemo have published a paper on costs and benefits of creating rain gardens in urban areas. The paper, which appears in the journal Environmental Protection and Natural Resources, is based on the joint IEP-Vista project on climate adaptation in Poland that was conducted in 2017.

From the introduction: In urban areas, the most pressing adaptation challenges are associated with the problem of poor retention of rainstorm water. Hence, recommended actions focus on improving rainwater retention in the landscape. The article attempts to show the costs and benefits of one of the solutions – a green garden. When analysing the cost of green garden implementation, account should be taken of the cost of investment and upholding, as well as the alternative cost of land use. Then again, the benefits of the rain garden comprise the losses avoided by limiting the effects of rainstorm as well as improving the quality and quantity of water in the urban landscape. The cost and benefit monetization makes it possible to decide on the financial viability of implementing rain gardens in the city. The paper is available here.

Partner and professor Haakon Vennemo at Vista has contributed to the Palgrave Handbook of Sustainability, which was published recently at Palgrave Macmillan. The title of his contribution, with professor Kristin Aunan of Cicero, is titled Air Pollution and Greenhouse Gas Emissions in China: An Unsustainable Situation in Search of a Solution. The Palgrave handbook is available here.

June 12th, Nina Bruvik Westberg and Sofie Waage Skjeflo presented the paper Demand for climate resilient housing – Experimental evidence from Vietnam, at the 16th Nordic Conference in Development Economics, an annual conference with around 80 participants.

The paper presents preliminary results from a field experiment in Vietnam, where we have randomly assigned offers of two different packages of microcredit, grants and technical assistance to support poor households who want to upgrade their houses to improve resilience to storms. The paper is written as part of the project Implementing incentives for climate resilient housing among the urban poor in Vietnam, and is co-authored with Haakon Vennemo, Henrik Lindhjem, Tuan Huu Tran, Phong Van Giai Tran and Tuan Tran Anh. A draft version of the paper can be downloaded here.

Haakon Vennemo in Vista held Monday a guest lecture at NHH’s course in natural resource and environmental economics for master students. Vennemo was invited by professor Gunnar Eskeland. The topic for Vennemo’s presentation was “Environmental risk in China: Theory meets reality”.

Henrik Lindhjem is appointed, together with Professor Rauli Svento at the Oulu Business School, to the PhD committee of Heini Ahtiainen at the Universitetet i Helsinki, Finland. The topic of the dissertation is ”Benefits of reduced eutrophication for policy making - evidence from Finland, the Baltic Sea area and Europe”. The topic fits well into the methodological work that Vista has undertaken on valuation and management of ecosystem services from inland and coastal waters in recent years, including for the Norwegian Coastal Administration.

Haakon Vennemo from Vista is presently guest researcher at The University of California, Berkeley. 30th of April, Haakon held a scientific seminar in applied economics and social research with participatns from Vista Analysis and The Norwegian Center at UC Berkeley.

Dr. Ma Guoxia of the Chinese Academy of Environmental Planning (CAEP) has finalized a research mission in Norway to study economic models including environmental effects. The goal is to use Norwegian experience to better incorporate environmental considerations in environmental planning in China. The research mission is part of a three-year bilateral project on environmental risk reduction between CAEP and Vista Analysis. The photo shows Ma Guoxia (CAEP) with Norwegian colleagues (Statistics Norway).

Vista Analysis, CICERO and the Chinese Academy of Environmental Planning (CAEP) carried out a workshop on environmental risk in Tongling, Anhui province, 28-29 May. The aim of the workshop was to transfer knowledge of international best practise and apply this knowledge in training exercises. The participants were from the Ministry of Environmental Protection (MEP) in Beijing as well as the Environmental Protection Bureaus in Jiangsu and Guizhou provinces and the cities Anshun, Chengdu and Tongling. The workshop is part of a bilateral cooperation project, supported by the Norwegian Embassy in Beijing and MEP.

Annegrete Bruvoll and Haakon Vennemo have contributed to a chapter on environmentally harmful subsidies in the Edgar Elgar book Paying the Polluter. The financial means embedded in subsidies for unsustainable systems of production and consumption are increasingly well studied and reported. This has led to policy recommendations (e.g. OECD, EU) on how to reform subsidy systems in support of the necessary transitions to a low carbon and ecosystem resilient society based on a strong resource efficient economy. The authors in this book contribute to the debate based on recent, high quality and policy relevant research. It is a timely contribution to a pressing financial issue in environmental policy.

In an article in European Union Politics, Vibeke Wøien Hansen studies voting bahaviour in the EU. Politics in the Council is Janus-faced. There is bargaining with identifiable winners and losers, yet the voting records show high levels of agreement. These two sides have almost exclusively been studied in isolation even though standard theoretical models of voting typically assume that actors’ behaviour is guided by their positions relative to the proposal and the status quo. By combining positional data and voting data, we evaluate to what extent voting is driven by salience-weighted issue-specific positions. Our results show that governments’ voting behaviour is guided by their issue-specific positions. The relationship between preference-based positions and votes is stronger when we impute values for the missing positions in the positional data. This illustrates the importance of cautious treatment of missing data in EU decision-making.

Michael Hoel, partner in Vista, is the winner of the 2011 edition of the EAERE European Lifetime Achievement Award in Environmental Economics. More information here.

Congratulations!!

Henrik Lindhjem and Simen Pedersen in Vista Analysis has published in Review of Network Economics. The publication builds on a study the authors conducted for the Norwegian Post and Telecommunications Authority in 2010-2011, and contains a Cost-Benefit Analysis of the Universal Service Obligation in Norway. Read the publication here

We conduct, to our knowledge, the first cost-benefit analysis of the universal service obligation (USO) in the postal sector. Three alternatives are analysed that reduce delivery frequency and/or delivery speed, with particular emphasis on quantifying the potential loss of consumer benefits. Social cost savings are analysed for the service provider, for the environment and for the government through lower levels of distortionary taxes. Although there are challenges involved in measuring the net welfare change, especially loss in consumer benefits, our results suggest that only the largest reduction in the USO may be justified on social efficiency grounds.