Gabriel Chan

What Drives States to Support Renewable Energy

Why do states support electricity generation from renewable energy sources? Lyon/ Yin (2010), Chandler (2009), and Huang et al. (2007) have answered this question for the adoption of renewable portfolio standards (RPS) at the U.S. state level. This article supplements their work by testing the core hypotheses on the EU27 sample between 1990 and 2010. Furthermore, the article asks why the majority of EU states relies on feed-in-tariffs (FIT). The study conducts logistic time series cross-section regression analyses that run on a hazard model. Evidence in support of private interest theory and public interest theory is provided. (a) The existence of a solar energy association increases the probability of a state to adopt regulation. (b) Solar radiation, and (c) the unemployment rate also increase the odds. (d) Electricity market concentration decreases the probability of transition.

The So2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation

The introduction of the U.S. SO2 allowance-trading program to address the threat of acid rain as part of the Clean Air Act Amendments of 1990 is a landmark event in the history of environmental regulation. The program was a great success by almost all measures. This paper, which draws upon a research workshop and a policy roundtable held at Harvard in May 2011, investigates critically the design, enactment, implementation, performance, and implications of this path-breaking application of economic thinking to environmental regulation. Ironically, cap and trade seems especially well suited to addressing the problem of climate change, in that emitted greenhouse gases are evenly distributed throughout the world’s atmosphere. Recent hostility toward cap and trade in debates about U.S. climate legislation may reflect the broader political environment of the climate debate more than the substantive merits of market-based regulation.

Transforming U.S. Energy Innovation

The United States and the world need a revolution in energy technology—a revolution that would improve the performance of our energy systems to face the challenges ahead. A dramatic increase in the pace of energy innovation is crucial to meet the challenges of: • Energy and national security, to address the dangers of undue reliance on dwindling supplies of oil increasingly concentrated in some of the most volatile regions of the world, and to limit the connection between nuclear energy and the spread of nuclear weapons; • Environmental sustainability, to reduce the wide range of environmental damages due to energy production and use, from fine particulate emissions at coal plants, to oil spills, to global climate disruption; and • Economic competitiveness, to seize a significant share of the multi-trillion-dollar clean energy technology market and improve the balance of payments by increasing exports, while reducing the hundreds of billions of dollars spent every year on importing oil. In an intensely competitive and interdependent global landscape, and in the face of large climate risks from ongoing U.S. reliance on a fossil-fuel based energy system, it is important to maintain and expand long-term investments in the energy future of the U.S. even at a time of budget stringency. It is equally necessary to think about how to improve the efficiency of those investments, through strengthening U.S. energy innovation institutions, providing expanded incentives for private-sector innovation, and seizing opportunities where international cooperation can accelerate innovation. The private sector role is key: in the United States the vast majority of the energy system is owned by private enterprises, whose innovation and technology deployment decisions drive much of the country’s overall energy systems. Efficiently utilizing government investments in energy innovation requires understanding the market incentives that drive private firms to invest in advanced energy technologies, including policy stability and predictability. The U.S. government has already launched new efforts to accelerate energy innovation. In particular, the U.S. Department of Energy is undertaking a Quadrennial Technology Review to identify the most promising opportunities and provide increased coherence and stability. Our report offers analysis and recommendations designed to accelerate the pace at which better energy technologies are discovered, developed, and deployed, and is focused in four key areas: • Designing an expanded portfolio of federal investments in energy research, development, demonstration (ERDD • Increasing incentives for private-sector innovation and strengthening federal-private energy innovation partnerships; • Improving the management of energy innovation institutions to maximize the results of federal investments; and • Expanding and coordinating international energy innovation cooperation to bring ideas and resources together across the globe to address these global challenges.

Making Technological Innovation Work for Sustainable Development

This paper presents insights and action proposals to better harness technological innovation for sustainable development. We begin with three key insights from scholarship and practice. First, technological innovation processes do not follow a set sequence but rather emerge from complex adaptive systems involving many actors and institutions operating simultaneously from local to global scales. Barriers arise at all stages of innovation, from the invention of a technology through its selection, production, adaptation, adoption, and retirement. Second, learning from past efforts to mobilize innovation for sustainable development can be greatly improved through structured cross-sectoral comparisons that recognize the socio-technical nature of innovation systems. Third, current institutions (rules, norms, and incentives) shaping technological innovation are often not aligned toward the goals of sustainable development because impoverished, marginalized, and unborn populations too often lack the economic and political power to shape innovation systems to meet their needs. However, these institutions can be reformed, and many actors have the power to do so through research, advocacy, training, convening, policymaking, and financing. We conclude with three practice-oriented recommendations to further realize the potential of innovation for sustainable development: (i) channels for regularized learning across domains of practice should be established; (ii) measures that systematically take into account the interests of underserved populations throughout the innovation process should be developed; and (iii) institutions should be reformed to reorient innovation systems toward sustainable development and ensure that all innovation stages and scales are considered at the outset.

Have State Renewable Portfolio Standards Really Worked? Synthesizing Past Policy Assessments to Build an Integrated Econometric Analysis of RPS effectiveness in the U.S.

Renewable portfolio standards (RPS) are the most popular U.S. state-level policy tools for promoting deployment of electricity from renewable energy (RES-E). While several econometric studies have estimated the effect of RPS policies on RES-E deployment, results are sometimes contradictory. Thus, there is a need to not only reconcile these studies but also establish a definitive answer to the question whether RPS policies have been effective in increasing RES-E deployment. We use a panel – 50 states over 1990-2010 – of renewable deployment, policy design elements and market dynamics to capture the heterogeneity in state RPS design and state characteristics. We run time series cross sectional regressions with fixed effects, and verify the causal effect implied by our results with a nonparametric matching analysis. We trace discrepancies among past findings to differences in data classification and model specification. We show that the key feature of RPS policies – RPS stringency – has no effect, and in some cases a negative effect, on RES-E deployment. We also investigate the impact of individual RPS features. We show that renewable energy certificate (REC) unbundling as well as the presence of RPS in neighboring states is correlated with greater RES-E deployment locally, while other features – such as allowing greater flexibility to buy renewable energy from out-of-state – slows in-state RES-E deployment. We show that mandatory green power options have a positive effect on RES-E deployment while net metering schemes appear to have a negative impact. However, we were unable to detect any impact of an interaction effect between RPS and these policies. Finally, we investigate the impact of policies on the deployment of individual renewable technologies (biomass, geothermal, solar, and wind) and demonstrate differentiated policy impacts, such as biomass driving the result on RPS stringency.

Reforming The Ipcc’S Assessment Of Climate Change Economics

The Intergovernmental Panel on Climate Change (IPCC) is broadly viewed as the world’s most legitimate scientific assessment body that periodically assesses the economics of climate change (among many other topics) for policy audiences. However, growing procedural inefficiencies and limitations to substantive coverage have made the IPCC an increasingly unattractive forum for the most qualified climate economists. Drawing on our observations and personal experience working on the most recent IPCC report, published last year, we propose four reforms to the IPCC’s process that we believe will lower the cost for volunteering as an IPCC author: improving interactions between governments and academics, making IPCC operations more efficient, clarifying and strengthening conflict of interest rules, and expanding outreach. We also propose three reforms to the IPCC’s substantive coverage to clarify the IPCC’s role and to make participation as an author more intellectually rewarding: complementing the IPCC with other initiatives, improving the integration of economics with other disciplines, and providing complete data for policymakers to make decisions. Despite the distinct characteristics of the IPCC that create challenges for authors unlike those in any other review body, we continue to believe in the importance of the IPCC for providing the most visible line of public communication between the scholarly community and policymakers.

Six principles for energy innovation

Decades of experience must inform future initiatives, urge Gabriel Chan and colleagues. Decades of experience must inform future initiatives for energy innovation, urge Gabriel Chan and colleagues.

Improving Decision Making for Public R&D Investment in Energy: Utilizing Expert Elicitation in Parametric Models

Effective decision making to allocate public funds for energy technology research, development, and demonstration (RD (b) using a detailed energy-economic model to estimate evaluation metrics relevant to an energy RD and (c) using a novel sampling and optimization strategy to calculate optimal RD (2) uncertainty around the estimates of RD (3) a 10-fold expansion from 2012 levels in the annual RD (4) the greatest returns to public RD and (5) the current allocation of energy R&D funds is very different from optimal portfolios. Taken together, these results demonstrate the utility of applying new methods to improve the cost-effectiveness and environmental performance in a deliberative approach to energy R&D portfolio decision making.

Energy Technology Expert Elicitations for Policy: Workshops, Modeling, and Meta-Analysis

Characterizing the future performance of energy technologies can improve the development of energy policies that have net benefits under a broad set of future conditions. In particular, decisions about public investments in research, development, and demonstration (RD&D) that promote technological change can benefit from (1) an explicit consideration of the uncertainty inherent in the innovation process and (2) a systematic evaluation of the tradeoffs in investment allocations across different technologies. To shed light on these questions, over the past five years several groups in the United States and Europe have conducted expert elicitations and modeled the resulting societal benefits. In this paper, we discuss the lessons learned from the design and implementation of these initiatives in four respects. First, we discuss lessons from the development of ten energy-technology expert elicitation protocols, highlighting the challenge of matching elicitation design with a particular modeling tool. Second, we report insights from the use of expert elicitations to optimize RD&D investment portfolios. These include a discussion of the rate of decreasing marginal returns to research, the optimal level of overall investments, and the sensitivity of results to policy scenarios and selected metrics for evaluation. Third, we discuss the effect of combining online elicitation tools with in-person group discussions on the usefulness of the results. Fourth, we summarize the results of a meta-analysis of elicited data across research groups to identify the association between expert characteristics and elicitation results.