Laboratory for Energy Economics and Environmental Management

Ongoing Projects - ALL

List of Projects:


  • A decomposition analysis of changes in energy use and CO2 emissions in the Ghanaian energy economy by Michael Owusu Appiah and Lin Zhang


  • Bureaucratic Quality, Human Capital, and the Environment by Yao Yao, Haowei Yu and Lin Zhang


  • Can Human Capital Harness CO2 Emissions? by Yao Yao, Lin Zhang, Ruhul Salim, Shuddha Rafiq


  • Climate change induced agricultural water efficiency volatility and inequity of regional distribution by Lin Zhang and Yao An


  • Economics of Wastewater Management in China’s Industry by Lin Zhang and Philip Kofi Adom


  • Effects of Political and Ecological Uncertainties on Environmental Policies by Aude Pommeret, Haowei Yu and Lin Zhang


  • Energy intensity and energy efficiency: A stochastic frontier decomposition analysis of Ghana by Michael Appiah Owusu and Lin Zhang


  • Estimation of energy efficiency for educational buildings: A case study for Hong Kong by Joonho Yeo and Lin Zhang


  • Given and take, the role of political connections in corporate investment: Evidence from Chinese energy firm by Orlando Yu and Lin Zhang


  • Growing by recycling: An empirical evidence from OECD countries by Julie Metta and Lin Zhang


  • Housing Prices and Air Quality by Lin Zhang and Huanhuan Zheng


  • Is Opening to FDI Good or Bad for Economies with Low Bureaucratic Quality? by Haowei Yu and Gregmar Galinato


  • Structural persistence of water use efficiency in China by Philp Kofi Adom, Joonho Yeo, Lin Zhang


  • The agricultural water rebound effect in China by Lin Fang and Lin Zhang


Project Details :


  • A decomposition analysis of changes in energy use and CO2 emissions in the Ghanaian energy economy by Michael Owusu Appiah and Lin Zhang

  • Abstract: Mitigating global warming which mainly derives from GHG emissions without compromising economic growth and development has in the recent years remained very topical in many global summits, raising passionate debate in both scientific and political circles about how to balance the two. This is particularly so because of the serious implications of CO2 emissions for the quality of the environment; unleashing its concomitant effects on economic activities as well as the health of the citizens. This paper investigated the underlying drivers of changes in energy and energy-related emissions of the Ghanaian economy by employing decomposition analysis based on the Log Mean Divisia Index (LMDI) proposed by Ang (2005) using data spanning from 1980 to 2015. The data were divided into sub-periods to make the analysis parsimonious and more comprehensible. A sectoral analysis was conducted on the five cardinal sectors of the Ghanaian economy namely, the agricultural, industry, services and commercial, transport and residential sectors. The main energy sources are petroleum, traditional biomass fuels, natural gas, and electricity which is generated from fossil fuels and hydropower. The growing influence of the service sector is reflected in the increase in CO2 emissions. The results also showed that economic activity effect (scale effect) is the principal underlying driver of positive changes in both carbon emissions and energy use.


  • Bureaucratic Quality, Human Capital, and the Environment by Yao Yao, Haowei Yu and Lin Zhang

  • Abstract: There are countries with high human capital but low institutional quality, there are also countries with high institutional quality but low human capital. In practice, both types of countries may feature low environmental quality. Therefore, this paper tries to theoretically and empirically prove that there should be a significant environmental improvement when both human capital and institutional quality are high enough.


  • Can Human Capital Harness CO2 Emissions? by Yao Yao, Lin Zhang, Ruhul Salim, Shuddha Rafiq

  • Abstract: We examine the environmental impacts of human capital by using a provincial panel of China over the 1997–2016 period. We find human capital impacts CO2 emissions negatively in the long run, which is driven by specific age cohort and by particular type of human capital. With disaggregate emission data by energy sources and end emitters, we further demonstrate that human capital abates CO2 emissions through technology effect, and to some extent via energy efficiency improvement. These identified mechanisms are limited within the production sector and are absent from the household sector. Our finding is robust to a rich set of sensitivity checks addressing alternative pollution indicator, reverse causality and spatial consideration for instance.


  • Climate change induced agricultural water efficiency volatility and inequity of regional distribution by Lin Zhang and Yao An

  • Abstract: China has been increasingly facing with the huge pressure on deficient water resource in recent decades. Although water resources are the basis of food security, agricultural water shortage is rampant in China. The agricultural water use efficiency has been the core issue, notably under the circumstance of warming climate change trend. Our study focuses more on examining the climate change induced agricultural water efficiency volatility and its influence of different region. We find that, overall, climate change indeed decreases the agricultural water efficiency. However, the impact is inequity aiming at the regional distribution. With regard to the better adaptation to the climate change, we put forward some policy implication.


  • Economics of Wastewater Management in China’s Industry by Lin Zhang and Philip Kofi Adom

  • Abstract: In this paper, we examine the direct and the structural break-induced effect of national environmental regulation on industrial wastewater emissions. The results show that strict environmental regulation can partially offset the energy-induced effects imposed by the scale effects of FDI and cause positive behavioural responses by either limiting coal usage or improving upon coal usage technology and shift towards clean energy sources. We find the absence of scale economies in the provision of environmental services in the industrial sector due to the poor nature of the technical processes of industries. We further highlight the importance of raising the investment in environmental treatment and embracing trade liberalization in the improvement of industrial wastewater management.


  • Effects of Political and Ecological Uncertainties on Environmental Policies by Aude Pommeret, Haowei Yu and Lin Zhang

  • Abstract: We want to propose “working” policy suggestions for the complicated real world governance. Existing studies are normally highly simplified models of the real world, and the results may not be applicable when faced with much more complicated real problems. We considered natural uncertainty (e.g., catastrophe) and political uncertainty (e.g., lobbying) in our model, and try to find out feasible solutions to welfare maximization in such a case.


  • Energy intensity and energy efficiency: A stochastic frontier decomposition analysis of Ghana by Michael Appiah Owusu and Lin Zhang

  • Abstract: This study investigates the energy demand and efficiency of the Ghanaian economy by employing the stochastic frontier energy demand model with data spanning 1989 to 2015. The mean energy efficiency score is 0.95. The result shows that the transport sector is the principal driving force for the underlying energy demand growth in Ghana. This implies that the transport sector of Ghana holds a high energy savings potential for the Ghanaian economy. Our stochastic frontier decomposition analysis of energy intensity confirms that the transport sector contributes the most to positive changes in energy intensity. Therefore, it will be fruitful if more energy efficiency policy portfolios are introduced especially in the transport sector to improve energy efficiency. Also a novel contribution to the literature in the sense of decomposition of changes in energy intensity based on Stochastic Frontier Analysis is made.


  • Estimation of energy efficiency for educational buildings: A case study for Hong Kong by Joonho Yeo and Lin Zhang

  • Abstract: Energy efficiency has gained significant interest in Hong Kong. In this paper, we aim to estimate energy efficiency of educational buildings in Hong Kong with a case study of buildings in the City University of Hong Kong (CityU) by adopting stochastic frontier analysis. The model is estimated by using CityU data from 2011 to 2015. Our result shows the average level of energy efficiency is 0.872, with annual increasing tendency. Furthermore, our analysis illustrates that CityU is effective in saving energy based on performance score tendency, which increases from 0.08 to 0.17. Our decomposition analysis suggests that research activities account for a large share of overall energy consumption. Analysis on energy end-use shows university should improve efficiency in lab instrument sector as this sector is least efficient among four sectors. We expect this case study can provide the basic guideline for university-scale energy efficiency estimation in Hong Kong.


  • Given and take, the role of political connections in corporate investment: Evidence from Chinese energy firm by Orlando Yu and Lin Zhang

  • Abstract: Multiple explanations have been developed to explain the overinvestment issue across Chinese energy sector. However, it remains a black box in which the channel through how the political connections drives energy firms to made redundant investment. This study aims to explore the overinvestment issue of Chinese energy sectors through the lens of political connections based on the “Given and Take” assumption.


  • Growing by recycling: An empirical evidence from OECD countries by Julie Metta and Lin Zhang

  • Abstract: This paper quantifies the impact of the waste recycling on economic outputs for OECD countries from 2000 to 2012. We find positive and statistically significant impact of waste recovering on the economy. An increase of one percent of the recycled waste will lead to an increase of GDP by up to 0.44 percent. Waste management could be a new growth point for a stagnating economy. In addition, the benefits of waste recycling can be reinforced through two channels – labour and education. Therefore, the government could consider funding support for labour and education in the recycling industry, as it will not only enhance the environmental management but also bring in positive benefits of waste recycling on economic performance.


  • Housing Prices and Air Quality by Lin Zhang and Huanhuan Zheng

  • Abstract: In this paper, we explore the dynamic interaction between housing prices and air quality for 30 Chinese provinces from 2003 to 2015 using panel vector auto-regression. We document robust evidence that better air quality is rewarded by the market with higher housing prices and that faster house price growth in turn contributes to further air quality improvements. The positive impact of housing prices on air quality is stronger for more developed areas such as the eastern part of China, first-tier cities, and housing markets that grow faster than the median. From a time-series perspective, the contribution of housing prices to air quality improvements is more pronounced after the Global Financial Crisis, when landscape architecture and energy efficiency gained prominence in real estate development. Link to the project


  • Is Opening to FDI Good or Bad for Economies with Low Bureaucratic Quality? by Haowei Yu and Gregmar Galinato

  • Abstract: Opening to FDI may not necessarily be good for the economy. Traditional trade literatures often argues that international firms are more productive and less pollution-intensive, and therefore opening to FDI will benefit the economy. However, these conditions are not necessarily true. We try to show that opening up to FDI is good for the economy only when bureaucratic quality is high enough, otherwise the economy may worse off. The hypothesis should be true especially when foreign firms are more pollution-intensive.


  • Structural persistence of water use efficiency in China by Philp Kofi Adom, Joonho Yeo, Lin Zhang

  • Abstract: This paper measures the performance and dynamics of provincial water use efficiency by separating the long-run persistent part from the short-run transient part. We combine the stochastic frontier approach with panel Markov-switching and Tobit estimations. The data consists of 31 provinces observed over the period 2002-2016. The result reveals a mean efficiency of 0.5389 for aggregate water use, with evidence of significant provincial and regional disparities. The decomposed estimation shows that the persistent part accounts for a large part of the inefficiencies, which suggests that water use inefficiency problem in China is structural in nature. Therefore, water management and efficiency policies may benefit more from policies aimed at the long-term and not the short-term. Our further analysis on the driving factors reveals that, while income per capita and the length of pipeline per unit area decrease water use efficiency, a higher price and intense urbanization foster it.


  • The agricultural water rebound effect in China by Lin Fang and Lin Zhang

  • Abstract: Although the agricultural water productivity in China continuously increased over the last ten years by improvements in irrigation technology, the total agricultural water use did not decline as expected, mainly due to continuous increases in agricultural output partially derived from technological progress. Our study wants to measure the economic-wide agricultural water rebound effect in China (2004-2016) based on the method of energy rebound effect. We find that, the northeast region, the middle and lower reaches of the Yangtze River, and the areas along the northwest and the Yangtze River experience a greater agricultural water rebound effect than the other regions, and the changes in the inter-annual rebound effect are distinct.