Energy Institute Blog

A new EI working paper shows that a fuel-economy incentive in Japan created spillover benefits in the US market. Japanese cars affected by the policy improved MPG in the US, leading to greater greenhouse gas reductions in the US than Japan.

Threading the needle between climate ambition and industry opposition California is trying to finalize a major redesign of its carbon market. The timing is not great. Gasoline prices are pushing … Continue Reading A Stress Test for California Carbon Pricing

In late February, my co-authors and I blogged about a new tax credit for sustainable aviation fuel (SAF) that California Governor Gavin Newsom has proposed as a trailer bill to the 2026-27 state budget. It would allow refineries and other companies that pay diesel taxes in California to reduce their tax bill if they also produce sustainable aviation fuel. We argued that the proposed tax credit w…

Economists overwhelmingly favor carbon taxes and cap-and-trade over environmental regulatory standards, but voters disagree. Our new research shows that simple economic misunderstandings help explain why. Here’s a puzzle that has frustrated economists for decades: putting a price on pollution, through a pollution tax or cap-and-trade, provides the most efficient way to cut emissions. Ninety perc…

Almost-record-high diesel prices may make electric heavy duty trucks an even better deal! As you are probably not currently on a European vacation and reading this, or a truck driver … Continue Reading Diesel Is Having a Moment

The US Department of Energy is pursuing a costly policy to preserve coal capacity. Coal is the most rapidly declining source of electricity in the United States. The black rock … Continue Reading DOE Second Guesses Coal Plant Owners

Gasoline prices are way up and diesel up even more. Natural gas prices are spiking in most of the world, but unchanged in the US. Economics helps explain why. The … Continue Reading The Energy Economics of War

A new working paper highlights the challenges of working together. This Friday is one of the most exciting days of the year. I am talking, of course, about the leadEnergy Institute’s annual POWER conference. Every year, POWER highlights the very best in energy economics research. This year there is one paper I am particularly excited about.

Who should pay to manage wildfire risk in California? As the climate gets warmer and weirder, it’s getting harder to safely move hundreds of gigawatts of electricity across millions of … Continue Reading This Public Power Movement is Raising a Billion Dollar Question

If we want more EVs in the US, all we need to do is allow the world’s most popular EVs, which are made by Chinese brands, to compete directly in the US market. This is why I think a recent landmark trade deal announced between Canada and China is a really big deal, not just for Canada, but for the US and the climate.

This credit would reduce road funding, raise gasoline and diesel prices, and deliver small and expensive carbon emissions reductions. In California, road construction, maintenance, and repairs are funded primarily through excise taxes on gasoline and diesel. The Governor’s latest budget includes a proposal that would diminish this dedicated source of revenue. It would allow fuel suppliers to red…

About 18 months ago, I presented analysis predicting that renewing California's cap-and-trade program would stimulate demand for allowances and raise carbon prices. The opposite has happened. I just hate it when the world doesn't behave like an economic model. What could be going on?

Lean in on America’s fastest growing source of electricity supply. This week’s blog is co-authored with Emilia Chojkiewicz and Amol Phadke. Taking projections of all utilities in the U.S. together, … Continue Reading A Solution for the Fast Data Center Connection Challenge

In the U.S., it’s real, but broadly mischaracterized. It started in July 2024, during the presidential campaign. Donald Trump declared a crisis in energy prices, and promised he would bring … Continue Reading Locating the Electricity Affordability Crisis

What’s the best way to distribute the program’s revenues to households? Last month, when Gov. Newsom signed a bill extending California’s cap-and-trade program to 2045, one section of the bill … Continue Reading Spreading the Cap-and-Trade Wealth

New study shows regulated coal and gas units were 45% less likely to exit between 2011 and 2023. (Today’s post is co-authored by Paige Weber.) Hundreds of power plants have … Continue Reading Does Regulation Distort Exit Decisions?

Where the permitting reform rubber meets the road. A record number of Americans went electric vehicle shopping last quarter. Between July and September, EVs accounted for 10% of new vehicle … Continue Reading The Fast Lane to Electric Vehicle Charging

The international maritime organization gets close to a carbon tax. — If an environmental economist stumbled upon a magic lamp and got one wish from the genie, most of us … Continue Reading Carbon Pricing on the High Seas?

How do comparisons to railroads and fiber add up? Being an expert in the electricity industry is becoming cool again because, all of a sudden, the link between power and … Continue Reading Is There Really an Energy Silver Lining to a Datacenter Bubble?

Policies to promote sustainable aviation fuels would interact with existing biofuel policies, mostly by diverting fuels and feedstocks away from surface transportation and towards aviation.  Singapore Airlines offers the longest … Continue Reading What Would Happen If We Required Airplanes to Use More Biofuels?