The Global Electrification Frontier and Climate Change

Robin Burgess, Michael Greenstone, Nicholas Ryan and Anant Sudarshan
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Robin Burgess: Department of Economics, LSE
Michael Greenstone: Department of Economics, University of Chicago
Nicholas Ryan: Department of Economics, Yale University
Anant Sudarshan: Department of Economics, University of Warwick

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Off-grid solar promises a low-cost and carbon-free path to electrification. But will poor households choose off-grid power? We run a multi-year pricing experiment in rural India to estimate demand over all electricity sources, including off-grid solar, diesel generators, and both formal and informal connections to the grid. We find that off grid solar is an important stop-gap, but households value grid electrification five times more. The grid, however, decreases global surplus, both because household payments do not cover the cost of supply, in an environment with high informality, and because grid connections increase carbon damages. We apply our model to data from Africa and find a similarly strong preference for the grid among households there, underscoring the external validity of our results.

Date: 2026
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