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on Resource Economics |
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Issue of 2015‒09‒05
three papers chosen by |
| By: | Gerarden, Todd G. (Harvard University); Newell, Richard G. (Duke University); Stavins, Robert (Harvard University) |
| Abstract: | 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 thinking around four questions. First, are product offerings and pricing economically efficient? Second, are energy operating costs inefficiently priced and/or understood? Third, are product choices cost-minimizing in present value terms? Fourth, do other costs inhibit more energy-efficient decisions? We review empirical evidence on these questions, with an emphasis on recent advances, and offer suggestions for future research. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp15-004&r=all |
| By: | Aldy, Joseph E. (Harvard University and Resources for the Future); Pizer, William A. (Duke University and Resources for the Future) |
| Abstract: | The pollution haven hypothesis suggests that unilateral domestic climate change mitigation policy would impose significant economic costs on carbon-intensive industries, resulting in declining output and increasing net imports. In order to evaluate this hypothesis, we undertake a two-step empirical analysis. First, we use historic energy prices as a proxy for climate change mitigation policy. We estimate how production and net imports change in response to energy prices using a 35-year panel of approximately 450 U.S. manufacturing industries. Second, we take these estimated relationships and use them to simulate the impacts of changes in energy prices resulting from a domestic climate change mitigation policy that effectively imposes a $15 per ton carbon price. We find that energy-intensive manufacturing industries are more likely to experience decreases in production and increases in net imports than less-intensive industries. Our best estimate is that competitiveness effects--measured by the increase in net imports--are as large as 0.8 percent for the most energy-intensive industries and represent no more than about one-sixth of the estimated decrease in production under a $15 per ton carbon price. |
| JEL: | F18 Q52 Q54 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp15-046&r=all |
| By: | Bodansky, Daniel M. (AZ State University); Hoedl, Seth (Harvard University); Metcalf, Gilbert (Tufts University); Stavins, Robert (Harvard University) |
| Abstract: | Negotiations pursuant to the Durban Platform for Enhanced Action appear likely to lead to a 2015 Paris agreement that embodies a hybrid climate policy architecture, combining top-down elements, such as for monitoring, reporting, and verification, with bottom-up elements, including "nationally determined contributions" from each participating country, detailing what it intends to do to reduce emissions, based on its national circumstances. For such a system to be cost-effective--and thus more likely to achieve significant global emissions reductions--a key feature will be linkages among regional, national, and sub-national climate policies. By linkage, we mean a formal recognition by a greenhouse gas mitigation program in one jurisdiction (a regional, national, or sub-national government) of emission reductions undertaken in another jurisdiction for purposes of complying with the first jurisdiction's mitigation program. We examine how a future international policy architecture could help facilitate the growth and operation of a robust system of international linkages of regional, national, and sub-national policies. Several design elements merit serious consideration for inclusion in the Paris agreement, either directly or by establishing a process for subsequent international elaboration. At the same time, including detailed linkage rules in the core agreement is not desirable because this could make it difficult for rules to evolve in light of experience. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp15-003&r=all |