Research

2017
Mehling, Michael A., Gilbert E. Metcalf, and Robert N. Stavins. 2017. “Linking Heterogeneous Climate Policies (Consistent with the Paris Agreement) .” Harvard Kennedy School. Publisher's Version Abstract
The Paris Agreement has achieved one of two key necessary conditions for ultimate success – a broad base of participation among the countries of the world.  But another key necessary condition has yet to be achieved – adequate collective ambition of the individual nationally determined contributions. How can the climate negotiators provide a structure that will include incentives to increase ambition over time?    An important part of the answer can be international linkage of regional, national, and sub‐ national policies, that is, formal recognition of emission reductions undertaken in another jurisdiction for the purpose of meeting a Party’s own mitigation objectives. A central challenge is how to facilitate such linkage in the context of the very great heterogeneity that characterizes climate policies along five dimensions – type of policy instrument; level of government jurisdiction; status of that jurisdiction under the Paris Agreement; nature of the policy instrument’s target; and the nature along several dimensions of each Party’s Nationally Determined Contribution.  We consider such heterogeneity among policies, and identify which linkages of various combinations of characteristics are feasible; of these, which are most promising; and what accounting mechanisms would make the operation of respective linkages consistent with the Paris Agreement.
Inadequate policy surveillance has undermined the effectiveness of multilateral climate agreements. To illustrate an alternative approach to transparency, I evaluate policy surveillance under the 2009 G-20 fossil fuel subsidies agreement. The Leaders of the Group of 20 nations tasked their energy and finance ministers to identify and phase-out fossil fuel subsidies. The G-20 leaders agreed to submit their subsidy reform strategies to peer review and to independent expert review conducted by international organizations. This process of developed and developing countries pledging to pursue the same policy objective, designing and publicizing implementation plans, and subjecting plans and performance to review by international organizations differs considerably from the historic approach under the UN Framework Convention on Climate Change. This paper draws lessons from the fossil fuel subsidies agreement for climate policy surveillance.
Gerarden, Todd D., Richard G. Newell, and Robert N. Stavins. 2017. “Assessing the Energy-Efficiency Gap.” Journal of Economic Literature 55 (4): 1486–1525. Publisher's Version Abstract
Energy-efficient technologies offer considerable promise for reducing the financial costs and environmental damages associated with energy use, but it has long been observed that these technologies may not be adopted by individuals and firms to the degree that might be justified, even on a purely financial basis. We survey the relevant literature on this "energy-efficiency gap" by presenting two complementary frameworks. First, we divide potential explanations for the energy-efficiency gap into three categories: market failures, behavioral explanations, and model and measurement errors. Second, we organize previous research 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 synthesize academic research on these questions, with an emphasis on recent empirical findings, and offer suggestions for future research.
Hogan, William W. 2017. “An efficient Western Energy Imbalance Market with conflicting carbon policies.” The Electricity Journal 30 (10): 8–15. Publisher's Version Abstract
A reform of the Western Energy Imbalance Market should target the right problem. Import leakage is a problem; resource shuffling is a solution. Proposed modifications for the existing EIM design target the wrong problem and would work at cross purposes to the very reasons for the EIM’s existence. There is a better approach that would address the right problem and preserve the critical elements of the existing EIM design.
Altenburg, Tilman, and Dani Rodrik. 2017. “Green Industrial Policy: Accelerating Structural Change towards Wealthy Green Economies.” Green Industrial Policy. Concept, Policies, Country Experiences, edited by T. Altenburg and C. Assmann. Geneva, Bonn: UN Environment; German Development Institute / Deutsches Institut für Entwicklungspolitk (DIE). Publisher's Version
Mildenberger, Matto, and Dustin Tingley. 2017. “Beliefs about Climate Beliefs: The Importance of Second-Order Opinions for Climate Politics.” British Journal of Political Science. Cambridge University Press, 1–29.
2014
Green, Jessica F., Thomas Sterner, and Gernot Wagner. 2014. “A balance of bottom-up and top-down in linking climate policies.” Nature Climate Change 4 (12): 1064–1067. Publisher's Version Abstract
Top-down climate negotiations embodied by the Kyoto Protocol have all but stalled, chiefly because of disagreements over targets and objections to financial transfers. To avoid those problems, many have shifted their focus to linkage of bottom-up climate policies such as regional carbon markets. This approach is appealing, but we identify four obstacles to successful linkage: different levels of ambition; competing domestic policy objectives; objections to financial transfers; and the difficulty of close regulatory coordination. Even with a more decentralized approach, overcoming the 'global warming gridlock' of the intergovernmental negotiations will require close international coordination. We demonstrate how a balance of bottom-up and top-down elements can create a path toward an effective global climate architecture.
1018
California’s Greenhouse Gas (GHG) cap-and-trade program is a key element of the suite of policies the State has adopted to achieve its climate policy goals. The passage of AB 398 (California Global Warming Solutions Act of 2006: market-based compliance mechanisms) extended the use of the cap-and-trade program for the 2021-2030 period, while also specifying modifications of the program’s “cost containment” structure and directing CARB to “[e]valuate and address concerns related to overallocation in [ARB’s] determination of the allowances available for years 2021 to 2030.” The changes being considered by CARB will not only affect the program’s stringency, but also its performance by affecting the ability of the “cost containment” structure to mitigate allowance price volatility and the risk of suddenly escalating allowance prices. We address key design issues that were identified by the legislature in AB 398 and have been identified by CARB in its “Preliminary Concepts” white paper, including: (1) Price levels for the Price Ceiling and Price Containment Points; (2) Allocation of allowances between the auction budgets, Price Containment Points, and Price Ceiling; (3) “Overallocation” of GHG allowances; and (4) the program’s administrative and operational rules, such as procedures for distributing allowances to the market from the Price Ceiling or Price Containment Points, procedures for using allowances once distributed, and banking rules.
Download publication

Pages