March 17, 2017

Tropical Forests, Tipping Points, and the Social Cost of Deforestation

The existence of a forest-savanna tipping point implies that changes in forest resilience affect the marginal economic value of a standing forest. We propose a new framework for calculating the economic value of a standing tropical forest, and explore the implications of tipping points on the design of optimal land-use policy and payments for ecosystem services.

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March 17, 2017

When Do States Disrupt Industries? Electric Cars in Germany and the United States

When do states drive green industrial change? We show that in mature industries with powerful incumbents the ability of the state to organize private interests in support of technological change is critical to develop innovation policy. States with competitive state-business relations can accomplish this more easily than states with cooperative state-business relations. In the case of the auto industry, the United States adopted a policy package to commercialize electric cars. Germany, instead, adopted a wait-and-see policy based on coordination with automakers.

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February 10, 2017

Anticipation and Environmental Regulation

Environmental standards can affect new-equipment sales and used-equipment retirements. We identify two additional effects, of anticipation, on the flow and stock of regulated equipment, and discuss the implications for policy design and program evaluation.

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January 30, 2017

Limits to Arbitrage in Electricity Markets: A case study of MISO

Like in other deregulated markets, financial players were introduced to the Midwest electricity market to arbitrage price differences that distort planning decisions. Unlike other markets, this did not seemed to be working. Instead, we find some players bidding in the wrong direction and consistently losing money, possibly in an attempt to manipulate market prices.

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January 23, 2017

Wind Capacity Investments: Inefficient Drivers and Long-Term Impacts

In a new CEEPR Working Paper, Ian Schneider and Mardavij Roozbehani explain how existing production-based subsidies for wind energy bias marginal investments to underweight the market value of energy produced.

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January 19, 2017

Estimating the Future Supply of Shale Oil: A Bakken Case Study

How much shale oil do we have left? And how much of that can be recovered economically? A new estimation technique suggests that, in the Bakken play, roughly 8 billion barrels of the remaining shale oil resources could be developed at a cost of $50/barrel.

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