Energy & Environment

Substantial physical, biological and economic damages will occur as a result of climate change in the absence of strong policy action. In this set of economic facts, The Hamilton Project and the Stanford Institute for Economic Policy Research document the potential extent of these damages, while also weighing the relative costs and benefits of various policy interventions.

Because industrial sectors contribute a large fraction of total greenhouse gas emissions in the United States, addressing their emissions is an essential element of combating climate change. In this paper, Carolyn Fischer of Resources for the Future proposes using tradable performance standards to reduce industrial carbon emissions.

In this paper, David Popp points out that despite the recent progress made in clean technology innovation, much remains to be done in order to decarbonize our economy. He describes the evidence on different public policy approaches to spurring more clean energy innovation. Grounded in that evidence, Popp provides a set of guidelines for how best to target energy R&D investments and deploy innovations.  

If a robust carbon price is successfully implemented, other regulations that target carbon emissions may become redundant, less effective, or more expensive. Roberton Williams puts forward proposals to suspend or modify current climate policies that will become unnecessary or inefficient after a sufficiently high carbon price is implemented.

Despite progress toward a cleaner energy system, current U.S. policies appear insufficient to reduce emissions enough to avoid catastrophic climate change while sustaining economic growth. Energy innovation is a crucial part of addressing this problem, but a number of inefficiencies persist in the innovation system. To address this, Goldstein, Azoulay, Graff Zivin, and Bulović examine practices and institutions that successfully support the pharmaceutical innovation system and that hold important lessons for energy innovation.

In this paper, Greenstone, Sunstein and Ori propose two major steps towards simplifying fuel efficiency standards and refocusing the program on achieving guaranteed emissions reductions at lower cost to automakers. First, they propose targeting greenhouse gas (GHG) emissions directly, without differentiating by vehicle types and sizes, using data to project a given vehicle’s lifetime greenhouse gas emissions. Second they recommend establishing a robust cap-and-trade market to reduce compliance costs for automakers while providing considerably more certainty about the future path of carbon dioxide emissions.