Borenstein, Severin and Ryan Kellogg, Challenges of a Clean Energy Transition and Implications for Energy Infrastructure Policy, in Rebuilding the Post-Pandemic Economy, Melissa S. Kearney and Amy Ganz, Eds. Washington, DC: Aspen Institute Press (2021), 234-271.
The United States faces the challenge of dramatically reducing carbon emissions while simultaneously ensuring the reliable supply of on-demand energy services that its residents have come to expect. Federal policy will be instrumental in driving investments in energy infrastructure that will be required to transition the U.S. energy supply to zero-emissions sources. This paper discusses the major barriers that policy will need to overcome in order to successfully execute this transition at a reasonable cost. A core problem is that wind and solar generation are intermittent. Provision of reliable zero-emission supply therefore requires combining wind and solar resources with investments in dispatchable zero-emission sources (such as nuclear, hydroelectric, geothermal, and fossil-fueled power plants with carbon capture and sequestration), long-distance transmission, demand flexibility, and storage technologies. But given uncertainties about technological progress, it is difficult to know which combination of investments will be most cost-effective. We argue that broad incentives -- such as carbon pricing, clean energy standards, or clean energy subsidies -- that do not discriminate across zero-emissions resources will be essential for directing capital toward cost-effective investments in clean energy infrastructure. We also argue, however, that such incentives on their own will be insufficient to meet the overall challenge. Policy must also address a suite of additional problems in energy markets that clean energy pricing incentives alone will not address. These problems include motivating global emissions reductions, overcoming regulatory barriers to long-distance transmission construction, addressing deficiencies in wholesale energy markets, reducing utilities' inclusion of non-marginal costs in volumetric retail rates, eliminating inequities in the distribution of clean energy's benefits and costs, and funding infrastructure decommissioning at the end of its useful life.
Covert, Thomas R. and Ryan Kellogg, Ensuring Americans Receive Fair Value for U.S. Oil and Gas Resources, in U.S. Energy & Climate Roadmap: Evidence-Based Policies for Effective Action, Energy Policy Institute at the University of Chicago (2021), 148-159.
Federal mineral leasing could deliver higher returns for taxpayers and better protect the environment if policymakers increased royalty rates and minimum bids, eliminated deductions, shortened primary terms, and strengthen bonding requirements.
Kellogg, Ryan and Mar Reguant, Energy and Environmental Markets, Industrial Organization, and Regulation, in Handbook of Industrial Organization, volume 5, Ali Hortaçsu, Kate Ho, and Alessandro Lizzeri, Eds. Elsevier (2021), 615-742.
- Working paper (September, 2021)
This paper discusses contributions that industrial organization economists have made to our understanding of energy markets and environmental regulation. We emphasize the substantive contributions of recent papers while also highlighting how this literature has adopted and sometimes augmented theoretical and empirical tools from industrial organization. Many of the topics examined by this literature---especially auctions, investment, productivity and innovation, and regulation---also apply to a variety of settings beyond energy and the environment. We also indicate areas where future research is likely to be fruitful, with an emphasis on how industrial organization economists can help inform energy and environmental policies.