Stephen Bernow

Employment and other macroeconomic benefits of an innovation-led climate strategy for the United States

Abstract Climate protection policy and its analysis are pursued in the context of other societal goals, among them the maintenance of economic growth and high employment. Too often, however, analysis of energy and climate policy does not realistically reflect technological conditions and the dynamics of technological change. This tendency unnecessarily associates the decline in energy consumption or carbon emissions with the decline in national economic output or income. But there is ample prima facie evidence to the contrary. Just as in the 19th century when the perceived need to reduce labor inputs as part of the production process spurred labor-saving technological progress, now the need to reduce energy (and pollution) costs could spur innovation and diffusion of efficient and clean energy technologies. This, in turn, can increase overall growth in economic productivity. Energy technology analysts have identified many such existing and near-term commercial technologies, as well as innovations that can be foreseen beyond the immediate technological horizon, which would become widely used if policies were developed to overcome market and institutional barriers. This paper presents a macroeconomic analysis for a set of policies that would induce the adoption of more efficient and low-carbon technologies, and finds that overall employment and economic output could be increased by small amounts while significantly reducing carbon emissions.

An Evaluation of Integrated Climate Protection Policies for theUnited States

This paper presents and discusses an integrated set of policies designed to reduce U.S. carbon emissions over the next four decades. This innovation path also aims to promote environmental quality, particularly by reducing emissions of criteria air pollutants, to reduce U.S. dependence on imported oil, and to induce technological innovation and diffusion in energy production and consumption. The innovation path would reduce economy−wide carbon emissions by 26% below baseline projections for 2010 and by 62% below baseline projections for 2030; this translates into 10% below 1990 levels in 2010 and 45% below 1990 levels in 2030. Emissions of criteria pollutants also would be significantly reduced, as would petroleum imports by the United States. Moreover, the innovation path would yield cumulative net savings for the United States of

Full-cost dispatch: Incorporating environmental externalities in electric system operation

218 billion (1993 dollars) through 2010, or

Quantifying the impacts of a national, tradable renewables portfolio standard

19 billion on a leveled annual basis, and would result in 800,000 additional jobs nationwide by 2010. Although the overall findings from the innovation path analysis are robust, the results should be taken as indicative, rather than precisely predictive, owing to uncertainties in future costs, prices, technology performance, and consumer behavior.

Economic theory and climate change policy

Abstract Not just power system planning, but operations as well, should reflect the full cost of alternatives. This practice is now feasible and would reduce total costs of power supply, while increasing rates only slightly.

Modelling renewable electric resources: A case study of wind

Abstract A national renewables portfolio standard with tradable credits, like the one that was proposed in legislation in the 104th Congress, could cost residential consumers just pennies a week and guarantee markets for near-commercial renewable technologies, leading to the development of the renewables industry and multiple environmental benefits in restructured electricity markets.

An integrated approach to climate policy in the US electric power sector

Our willingness to embrace climate change policies depends on our perception of their benefits and costs. Evaluation of these costs and benefits requires careful economic analysis. Yet the standard tools for such assessment -computable general equilibrium (CGE) models are inadequate on several grounds. Their underlying theory suffers from well-known logical difficulties; in general, their equilibria may be neither unique, stable, nor efficient. Moreover, real-world phenomena such as increasing returns to scale, learning, and technological innovation are neglected in CGE models. These phenomena make the resulting equilibria in the models inefficient; in the real world they can lock society into sub-optimal technology choices. They introduce uncertainty and path-dependence, annihilating the concept of a single efficient allocation produced by the unfettered market. Yet conventional economics assesses the cost of policies solely on the basis of their departure from a purportedly efficient equilibrium ignoring deeper structural changes that are often decisive in practice. New socio-economic theories and models are emerging that allow for bounded rationality, the limiting and enabling character of institutions, technological change, and the complexities and uncertainties in economic evolution. Meanwhile, existing models should be modified to better reflect real-world phenomena and to abandon unfounded assumptions about the inherent inefficiencies of government intervention in the market.

From Social Costing to Sustainable Development: Beyond the Economic Paradigm

The central issue facing renewables in the integrated resource planning process is the appropriate assessment of the value of renewables to utility systems. This includes their impact on both energy and capacity costs (avoided costs), and on emissions and environmental impacts, taking account of the reliability, system characteristics, interactions (in dispatch), seasonality, and other characteristics and costs of the technologies. These are system-specific considerations whose relationships may have some generic implications. In this report, we focus on the reliability contribution of wind electric generating systems, measured as the amount of fossil capacity they can displace while meeting the system reliability criterion. We examine this issue for a case study system at different wind characteristics and penetration, for different years, with different system characteristics, and with different modelling techniques. In an accompanying analysis we also examine the economics of wind electric generation, as well as its emissions and social costs, for the case study system. This report was undertaken for the {open_quotes}Innovative IRP{close_quotes} program of the U.S. Department of Energy, and is based on work by both Union of Concerned Scientists (UCS) and Tellus Institute, including America`s Energy Choices and the UCS Midwest Renewables Project.

An evaluation of integrated climate protection policies for the US

The US electric power sector provides both unique challenges and opportunities for national climate policy. This paper discusses and evaluates policies to reduce carbon dioxide (CO2) emissions from electricity generation in the US. The paper begins with an overview of the history of the electric power sector, its recent developments, and its expected future evolution. Next, it summarizes the current policy context, focusing on barriers to lower-carbon and less polluting electricity generation. It then discusses policies to overcome these barriers, the approach taken to evaluate them, and results of the evaluation. The analysis demonstrates that a complementary package of supply-side policies can induce diffusion of environmentally benign technologies into the US generation mix, significantly reducing emissions of CO2 and other pollutants by 2010, at a modest cost. When combined with electric efficiency policies in the end-use sectors, the resulting integrated package of supply-side and demand-side policies results in deeper reductions in emissions, while yielding net monetary benefits.

Counting the Costs: Scientific Uncertainty and Valuation Perspective in EXMOD

We are witnessing a major transition in public policy regarding economics, the environment and human well-being. Appropriately enough, it has come at the onset of a new century, indeed millennium. Despite the groundwork laid before us, and that being laid today, we expect that our counterparts and the world’s citizens decades from now will recognize some but not all of the methods and approaches developed today, and hope they will look back with some kindness upon our modest beginnings.