Institutional Affiliation: Cornell University
|Investment versus Output Subsidies: Implications of Alternative Incentives for Wind Energy|
with Joseph E. Aldy, Richard L. Sweeney: w24378
This paper examines the choice between subsidizing investment or output to promote socially desirable production. We exploit a natural experiment in which wind farm developers could choose an investment or an output subsidy to estimate the impact of these policy instruments on productivity. Using instrumental variables and matching estimators, we find that wind farms claiming the investment subsidy produced 10 to 12 percent less power than wind farms claiming the output subsidy, and that this effect reflects subsidy incentives rather than selection. Introducing investment subsidies caused the Federal government to spend 14 percent more per unit of output from wind farms.
|Federal Coal Program Reform, the Clean Power Plan, and the Interaction of Upstream and Downstream Climate Policies|
with W. Spencer Reeder, James H. Stock: w22214
Coal mined on federally managed lands accounts for approximately 40% of U.S. coal consumption and 13% of total U.S. energy-related CO2 emissions. The U.S. Department of the Interior is undertaking a programmatic review of federal coal leasing, including the climate effects of burning federal coal. This paper studies the interaction between a specific upstream policy, incorporating a carbon adder into federal coal royalties, and downstream emissions regulation under the Clean Power Plan (CPP). After providing some comparative statics, we present quantitative results from a detailed dynamic model of the power sector, the Integrated Planning Model (IPM). The IPM analysis indicates that, in the absence of the CPP, a royalty adder equal to the social cost of carbon could reduce emissions by rou...
Published: Todd D. Gerarden & W. Spencer Reeder & James H. Stock, 2020. "Federal Coal Program Reform, the Clean Power Plan, and the Interaction of Upstream and Downstream Climate Policies," American Economic Journal: Economic Policy, vol 12(1), pages 167-199.
|Assessing the Energy-Efficiency Gap|
with Richard G. Newell, Robert N. Stavins: w20904
Energy-efficient technologies offer considerable promise for reducing the financial costs and environmental damages associated with energy use, but these technologies appear not to be adopted by consumers and businesses to the degree that would apparently be justified, even on a purely financial basis. We present two complementary frameworks for understanding this so-called “energy paradox” or “energy-efficiency gap.” First, we build on the previous literature by dividing potential explanations for the energy-efficiency gap into three categories: market failures, behavioral anomalies, and model and measurement errors. Second, we posit that it is useful to think in terms of the fundamental elements of cost-minimizing energy-efficiency decisions. This provides a decomposition that organizes ...
Published: Todd D. Gerarden & Richard G. Newell & Robert N. Stavins, 2017. "Assessing the Energy-Efficiency Gap," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1486-1525, December.
|An Assessment of the Energy-Efficiency Gap and its Implications for Climate-Change Policy|
with Richard G. Newell, Robert N. Stavins, Robert C. Stowe: w20905
Improving end-use energy efficiency—that is, the energy-efficiency of individuals, households, and firms as they consume energy—is often cited as an important element in efforts to reduce greenhouse-gas (GHG) emissions. Arguments for improving energy efficiency usually rely on the idea that energy-efficient technologies will save end users money over time and thereby provide low-cost or no-cost options for reducing GHG emissions. However, some research suggests that energy-efficient technologies appear not to be adopted by consumers and businesses to the degree that would seem justified, even on a purely financial basis. We review in this paper the evidence for a range of explanations for this apparent “energy-efficiency gap.” We find most explanations are grounded in sound economic theory...