Events & Media: Carolyn Fischer

The Bren School of Environmental Science & Management
at the University of California, Santa Barbara

Presents

A RESEARCH COLLOQUIUM

“Alternative Climate Policies and Intertemporal Emissions Leakage”

Carolyn Ficsher
Senior Fellow; Associate Director, Center for Climate and Electricity Policy
Resources for the Future

Thursday, Jan. 19, 2012
4:00 - 5:00
Bren Hall 1424

Carolyn Fischer is a leading environmental economist focusing particularly on energy and the environment.  We are lucky to have her visiting Bren for the entire winter quarter.Charles Kolstad, speaker host

Abstract
Efforts to limit cumulative emissions over the next century may be offset by emissions leakage, not only between countries but over time. Current price-cost margins for major reserves are ample, leaving scope for significant price reductions if climate policies alter demand for fossil fuels. This resource owner response to maintain extraction over time has been labeled the “green paradox,” which has a “strong” form that implies intertemporal leakage may reach 100%, and a “weak” form that notes policies like a faster transition to clean energy may accelerate emissions, shortening the time to adapt and increasing damages. We contribute to this literature by isolating the effects of intertemporal leakage, using a model of multiple pools of different extraction costs. We compare the effects of five policy options: accelerating cost reductions in the clean backstop, taxing emissions, improving energy efficiency, a clean fuel blend mandate, and mandating carbon capture and sequestration. A stylized one-pool model identifies two types of equilibria that extend to multiple pools: full exhaustion of the last pool, and partial exhaustion of the last pool. All policies can reduce cumulative emissions, but the backstop policy accelerates extraction while conservation policies delay emissions. However, when comparing to what would happen in the absence of resource rent adjustment, we find that conservation policies have higher intertemporal leakage rates, and backstop policies can have lower leakage than an emissions tax. Leakage rates generally decline as targets become more stringent. We calibrate an extension of this model to five major categories of oil.

Biography
Carolyn Fischer's research focuses on policy mechanisms and modeling tools that cut across environmental issues, from allowance allocation in emissions trading schemes to wildlife management in Zimbabwe. In the areas of climate change and energy policy, she has published articles on designing cap-and-trade programs, fuel economy standards, renewable portfolio standards, energy efficiency programs, technology policies, the Clean Development Mechanism, and the evaluation of international climate policy commitments. A current focus of her research is the interplay between international trade and climate policy, options for avoiding carbon leakage, and the implications for energy-intensive, trade-exposed sectors. In renewable energy, she is investigating the effects of such overlapping policies as subsidies, portfolio standards, and emissions regulation on environmental and innovation outcomes. In areas of natural resources management, her research addresses issues of wildlife conservation, invasive species, and biotechnology, with particular emphasis on the opportunities and challenges posed by international trade.

NOTE: Research colloquia are hosted by Bren faculty members and are generally high-level talks about research in a particular area of environmental science and management.

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