Information and Behavioral Approaches to Increase Electricity Payment and Reduce Pollution from Electricity in Pakistan

Abstract

Increased access to affordable and high-quality electricity services is needed in many low- and middle-income countries. Raising revenue through electrical bill payments can be key to supporting this goal, and help electricity utilities meet increasing electricity demand, while limiting non-technical losses. However, non-payment can result in fewer investments in infrastructure and upgrades, which in turn perpetuates poor service for households. Further, when electricity generation is dominated by fossil fuels, as in Pakistan, greater consumption of electricity services translates into higher carbon emissions. Thus, losses exacerbate the sector’s financial problems and its contributions to climate change. Utilities employ various approaches—technological and institutional innovations—to increase payment for electricity services consumed, yet often it remains low. The research team’s prior work in Karachi, Pakistan indicates that this social norm of not paying for electricity is linked to mistrust in billing practices, information failures, and financial constraints. This suggests a role for complementary interventions to shift norms. In partnership with Karachi Electric, researchers propose a randomized evaluation to test transparency, information, and financial interventions designed to decrease the wedge between consumption and generation. Randomizing interventions at the transformer level will allow the researcher team to estimate tons of CO2 abated.

Zhenxuan Wang

Assistant Professor

My research interests lie at the intersection of environmental and energy economics, climate policy, development economics, and public economics.