Spotlight Archives

The Economics of Keystone XL

Would the approval and construction of the Keystone XL pipeline from Alberta, Canada to the US Gulf Coast lead to increased emissions? In this Bloomberg opinion piece, CEEPR co-director Professor Christopher R. Knittel discusses the economics behind three key assumptions that would need to be valid in order for Keystone XL to produce more GHG emissions.

View full article.

(March 2013)

E2e Project to Provide Much-Needed Energy Efficiency Research

In a column in USA Today, CEEPR co-Director Christopher Knittel writes that more research into energy efficiency is needed if Americans are to meet the energy efficiency goal set by President Obama in his State of the Union Address. In the speech, President Obama called on Americans to “cut in half the energy wasted by our homes and businesses over the next 20 years.” Knittel details how E2e, a new joint program between MIT’s CEEPR and U.C. Berkeley, will conduct rigorous analysis into this area to identify where consumers are systematically making mistakes, and how large those mistakes are, before much more government money is spent on promoting energy efficiency.

(March 2013)

Economics Doctoral Students

MIT Economics doctoral students are researching a wide range of energy and environmental policy issues. Pictured above, from left to right, are Joseph Shapiro, Manasi Abhay Deshpande and Jennifer Peck.

Joseph Shapiro studies trade and the environment. His current research analyzes components of the EU Emissions Trading System, the Waxman-Markey Bill, and the global Kyoto Protocols, which regulate the CO2 emissions from transportation.

Manasi Abhay Deshpande studies the economic and health effects of environmental regulation and firm responses to regulation. She is currently working on a project on firm compliance and trading behavior in the U.S. Acid Rain Program. 

Jennifer Peck’s work focuses on the political economy of global oil markets and on the microeconomic development issues of resource-rich countries. A current line of her research explores the relationship between oil imports and domestic politics in the United States. Another evaluates the effectiveness of Saudi labor market policies in combating unemployment and encouraging the growth of the private sector.

(December 2012)

CFTC Roundtable on the Proposed Volcker Rule

CEEPR Executive Director Dr. John Parsons’ research and engagement on risk management and the reform of derivatives markets sent him to the Commodity Futures Trading Commission’s (CFTC) Roundtable on the proposed Volcker Rule. The CFTC is one of several regulatory agencies tasked with implementing the section of the Dodd-Frank Act known as the Volcker Rule. How the rule is implemented may impact the liquidity of key financial markets. Video for the Roundtable is available here. The transcript is available on the CFTC website.


Dr. Parsons recently released a CEEPR Working Paper on the impact of the Dodd-Frank derivative reforms on the cost of hedging by non-financial corporations. Energy companies are among the most active users of commodity derivatives.

(June 2012)

Briefing on the BP Statistical Review of World Energy

Date: Monday, June 18
Time: 10:30 a.m.–12:00 p.m.
Location: E19-319

For more than 60 years the BP Statistical Review of World Energy has published some of the most comprehensive analysis on global energy markets.

The review provides valuable data to industry professionals, media, government, shareholders and academics worldwide.

This presentation will review developments in energy markets in 2011 covering oil, gas, coal, and renewables and how those energy markets interacted with the global economy.

Joseph Giljum is an Economist at BP and analyzes short and long-term oil supply dynamics for the team’s oil market analysis, covers North American natural gas markets, and examines the US economy for the team’s macro outlooks. He is responsible for the oil market dimensions for the annual BP Statistical Review of World Energy and the BP 2030 Energy Outlook.

(June 2012)

Pushing Forward by Looking Back

  Michael Greenstone writes in the Washington Post that President Obama’s May 10 executive order mandating periodic examination of existing regulations is the most fundamental shift in regulatory policy in more than three decades. The new policy will ensure that regulations are delivering their promised benefits.

This column continues Greenstone’s work on cost-benefit analysis of regulatory actions. In November 2011, his testimony to the Senate Budget Committee Task Force on Government Performance, “Improving Regulatory Performance: Lessons from the United Kingdom” outlined reforms designed to produce regulations with benefits that exceed costs.

Michael Greenstone served as the Chief Economist on the Council of Economic Advisors, an agency within the Executive Office of the President, from 2009–2010. The Council offers the President objective economic advice on both domestic and international economic policy.

PDF

(May 2012)

Professor Christopher Knittel

     Knittel is the William Barton Rogers Professor of Energy Economics at the MIT Sloan School of Management, having joined MIT earlier this year. He is known for inventive, heavily empirical work largely focusing on energy and transportation, although he has studied electricity markets and corporate strategies as well.

Knittel’s research addresses a clutch of practical and linked questions: How much progress have automakers made on fuel efficiency? (More than you might think.) How do car owners respond when fuel prices rise? (They really do ditch their gas-guzzlers.) How large are the collateral health benefits of removing dirty vehicles from the nation’s fleet? (Very large.) 

All told, Knittel has produced concrete findings that he hopes will have an impact in the halls of Washington. “A lot of energy policies that we have are not the most efficient policies,” he says. “I want to inform policymakers what the true costs and benefits of certain policies are.”

View full article.

(March 2012)

Future of Electric Grid Report

     On Monday, December 5th, members of the MIT study team presented the results of The Future of the Electric Grid: An MIT Interdisciplinary Study at the National Press Club, 529 14th Street NW, Washington, DC. The press conference at which the study was released was webcast and can be viewed here.

   This two year, multi-disciplinary study identifies the main opportunities and challenges facing the development of the U.S. electric grid over the next two decades and recommends policy actions to facilitate its evolution into a “smart grid” that can help meet the nation’s electricity needs in the 21st century.

    The study was co-chaired by Professor Richard Schmalensee, CEEPR's Director and Former John C Head III Dean of the MIT Sloan School of Management, and John G. Kassakian, Professor of Electrical Engineering and Computer Science and Former Director of the MIT Laboratory for Electromagnetic and Electronic Systems. Professor Henry D. Jacoby and Visiting Professor Ignacio Pérez Arriaga contributed to the economic analysis, as well as CEEPR research assistant Vivek Sakhrani.

View full report.

(December 2011)

CEEPR Ph.D Students

   Her current work involves looking at questions such as who bears the different risks in different parts of the CCS value chain, and how alternate commercial structures such as contracts can be used to efficiently manage the various risks and the potential liabilities along the value chain. This research is a part of MIT’s Energy Conversion Project which is funded by BP.

   She is also interested in the energy policy challenges in developing countries, and is involved in a project with the MIT School of Engineering that focuses on rural electrification in India.

   He is currently working on a project funded by the Energy and Financial Markets Initiative at the US Energy Information Administration. The goal of the project is to map out how exposure to oil price risk is channeled through the economy, from resource owners to producers to investors. He is identifying contractual exposures, and financial structures such as royalty trusts, as well as hedges using futures contracts, swaps and other derivatives.

Future of Natural Gas Report

    MIT has completed a multi-year study on the Future of Natural Gas. This report updates an interim report released in June 2010.

    The interdisciplinary study examined the scale of U.S. natural gas resources and the potential of this fuel to reduce greenhouse gas emissions. The study’s economic analysis of the effects of a national policy calling for a 50 percent reduction in greenhouse gas emissions shows that such a policy would result in widespread substitution of natural gas for coal in electricity generation. However, in order to achieve even greater reductions in carbon emissions — which may be mandated in coming decades — natural gas will in turn need to make way for other low- or zero-carbon sources of energy. It is in this sense that natural gas may be seen as a “bridge” rather than as the ultimate long-term solution itself.

    The study was co-chaired by Professor Ernest J. Moniz, Director of the MIT Energy Initiative (MITEI), Professor Henry D. Jacoby of the Sloan School of Management, and Dr. Tony Meggs, Visiting Engineer of the MIT Energy Initiative. Numerous CEEPR and Joint Program researchers were involved in the economic analysis including Dr. John Parsons, Professor Ignacio Pérez-Arriaga, Dr. John Reilly, Dr. Sergey Paltsev, and Dr. Mort Webster.


View full report.

Future of the Nuclear Fuel Cycle Report Release

  MIT has completed a 3-year study on the Future of the Nuclear Fuel Cycle. The study addresses two overarching questions: (1) What are the long-term desirable fuel cycle options and (2) What are the implications for near-term policy choices?

   The press conference at which the study was released was webcast and can be viewed here. A summary of the report’s conclusions had been released earlier in September in a press conference held at the Center for Strategic and International Studies which can be viewed here. 

    The study is interdiscliplinary with contributions by a number of faculty. CEEPR’s Executive Director, Dr. John Parsons of the Sloan School of Management, contributed to the economic analysis, as did CEEPR student research assistants Guillaume De Roo and Yangbo Du. The study was co-chaired by Professor Ernest J. Moniz, Director of the MIT Energy Initiative (MITEI), and Professor Mujid Kazimi, Director of the MIT Center for Advanced Nuclear Energy Systems. Dr. Charles Forsberg, served as Executive Director.

View full report.

IAP Lecture Series Power Systems Economics: Theories and Reality

Dr. Jean-Pierre Hansen will teach the IAP course “Power Systems Economics: Theories and Reality.” Dr. Hansen is a former CEO at the Belgian electricity company, Electrabel, and currently a member of the Executive Committee of its parent energy company, GDF SUEZ where he is Chairman of the Energy Policy and Market Risk Committees. The series of four lectures will be held from January 24 to 27. Program details are as follows:

Mon Jan 24, 02:30-04:00pm, E52-175
Did you say “Market”?… (How) Does it (really) work for electricity
Tue Jan 25, 02:30-04:00pm, E52-175
Ricardo’s nuclear power plants: why should a manager know the Theory of Rent?
Wed Jan 26, 02:30-04:00pm, E52-175
Market Power: how can it be measured – proved?
Thu Jan 27, 02:30-04:00pm, E52-175
From C. Adams to Averch-Johnson… and many others: the myth of perfect regulation.

CEEPR Workshop in Tokyo

    CEEPR and MIT’s Joint Program, together with Japan’s Institute of Energy Economics (IEEJ) co-hosted a Workshop on energy and climate change policy in Tokyo on September 30-October 1, 2010. The Workshop took place in the Keidanren Kaikan. The workshop, CEEPR's first in Asia, had close to one hundred participants from China, Russia, Hong Kong, Korea, Thailand, Malaysia, Indonesia, and of course Europe, the US and Japan. It was initiated by CEEPR to demonstrate its interest in making better connections with Asia where much of the economic growth is expected in the coming years.

    The workshop showcased MIT institute-wide studies (Future of Natural Gas, Nuclear Fuel Cycle and Future of the Electric Grid), as well as output from research and analysis of the MIT Joint Program on the Science and Policy of Global Change. IEEJ took on the responsibility of inviting speakers for 5 of the 6 sessions, which added to the diversity of perspectives presented to the participants.

    Dr. Tsutomu Toichi who was the counterpart of Loren Cox (CEEPR's Associate Director for Program Development) in arranging this workshop has had a long relationship with MIT, including as a visiting scholar three decades ago. Loren found Dr. Toichi to be "a wise adviser in all matters logistic, cultural and intellectual," and looks forward to working with him again on such a workshop in the future.

Symposium in honor of Henry D. Jacoby Co-Founder and Co-Director of the Joint Program on the Science and Policy of Global Change

   Please join MIT's Joint Program on the Science and Policy of Global Change on  JUNE 24 at an Afternoon Symposium to honor and pay tribute to Program Co-Founder and
Co-Director, Professor Henry D. "Jake" Jacoby. The afternoon will consist of a series of guest lectures on the topic:

   "Perspectives on Energy and Climate Policy Research"

Thursday, June 24, 2010
1:00-5:30 p.m.
Wong Auditorium E51 - Tang Center

Massachusetts Institute of Technology

Just published: Pricing Carbon — the European Union’s Emissions Trading Scheme

   The first attempt by any group of nations to establish a hard limit on greenhouse gas emissions – was a success, according to a new book, Pricing Carbon, coauthored by MIT CEEPR researcher Denny Ellerman and his coauthors Frank J. Convery of the University College Dublin, and Christian de Perthuis of the Université de Paris IX (Paris-Dauphine) with contributions by Emilie Alberola, Barbara K. Buchner, Anaïs Delbosc, Cate Hight, Jan Keppler, and Felix Chr. Matthes. Pricing Carbon provides the first detailed description and analysis of the EU ETS, focusing on the first ‘trial’ period of the scheme (2005–7).
  The publication is the result of several years of research co-sponsored by CEEPR together with several other institutions, including MIT’s Joint Program on the Science and Policy of Global Change. The Doris Duke Charitable Foundation provided an important grant that supported CEEPR’s work on the project. Many of the individual pieces of research that inform the final book have appeared as CEEPR Working Papers.
  The final release of the book on February 10 was an occasion for a day long conference at the Université de Paris IX (Paris-Dauphine).

Intro to Climate Science: Paleoclimate
Intro to Climate Science: Introduction to Climate Modeling
Climate Change 101: Introduction to Climate Change Economics & Policy
Climate Change 102: Recent Developments in US Climate Policy Legislation
Climate Change 103: Issues in Climate Policy – Technological Change & Biofuels

   In the Spring Term, Professor Ignacio Perez-Arriaga, who has been visiting MIT from IIT, will repeat his popular course, ESD 934, Engineering, Economics and Regulation of the Electric Power System. This course addresses the intersection of the power engineering with economics, regulatory and environmental perspectives.

MITEI Celebrates 70th Birthday of Professor John Deutch

Richard Schmalensee to be new Director of CEEPR

CEEPR Hosts Workshop in Washington D.C.

Professor Joskow heads to the Sloan Foundation

Long time CEEPR Director, Professor Paul Joskow, has resigned his position in order to become President of the Alfred P. Sloan Foundation. The Sloan Foundation is a philanthropic nonprofit institution, established in 1934, funding programs in science, technology, education and important national issues. CEEPR said farewell to Paul’s formal involvement at a festive dinner at our December research Workshop. Paul’s contributions to research and public policy have been great, and we look forward to his future contributions from this new vantage point.

(December 2007)

BP Funds Energy Conversion Research

CEEPR is collaborating with professors in a number of engineering disciplines on a research program that will explore the conversion of low-value carbon feedstocks such as petcoke and coal to high-value products such as electricity, liquid fuels and chemicals while minimizing carbon dioxide emissions. The program is being funded by BP as a part of its commitment to the MIT Energy Initiative. CEEPR’s work is targeted to the analysis of the economic institutions and policies necessary for the successful development of a carbon sequestration industry, as well as an analysis of the integration of heavier feedstocks into the North American fuels market.

(September 2007)