Essays in environmental economics and development economics

Hussain, Azhar (2025) Essays in environmental economics and development economics. PhD thesis, London School of Economics and Political Science.

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Abstract

This thesis examines how climate-related risks and responses ranging from natural disasters to green transition and public mobilization, shape economic behavior, perceptions, and political outcomes. It highlights how climate risks and social responses shape both market outcomes and politics, with implications for designing effective climate policy. The first chapter examines the economic effects of flooding in Indonesia, focusing on its impact on firm behavior and regional economic variables. Using granular firm-level data and spatial data on historical floods, I estimate the short-run effects of flood events and find that more severe floods significantly reduce aggregate output, hinder business formation, and erode firm-level capital. A model of firm entry under climate risk reveals that these effects are largely driven by perceived flood risk, thereby emphasizing the anticipatory behavior of firms and the importance of flood mitigation infrastructure, such as flood defenses. The second chapter addresses the environmental implications of coal-fired power plants. Combining geocoded survey data from 51 countries with plant-level information, we document that individuals living within 40 km of coal plants are systematically more dissatisfied with local air quality. Employing equivalent variation measure, we show that replacing coal plants with renewable technology is feasible even if the gains from improved air quality are only considered in the benefits calculations. The third chapter explores the political consequences of climate-related protests. Analyzing large-scale protests, such as the Fridays for Future, we find that protests significantly increase climate awareness in the short run, as evidenced by spikes in Google search trends and media coverage. These shifts also translate into increased electoral support for Green parties in Europe and influence political discourse within the UK Parliament.

Item Type:	Thesis (PhD)
Additional Information:	© 2025 Azhar Hussain
Library of Congress subject classification:	G Geography. Anthropology. Recreation > GE Environmental Sciences H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor
Sets:	Departments > Economics
Supervisor:	Besley, Timothy and Burgess, Robin and Bryan, Gharad and Sturm, Daniel
URI:	http://etheses.lse.ac.uk/id/eprint/4876

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