Gideon Bornstein, Per Krusell, Sérgio Rebelo, 01 March 2021

Oil markets have long been central to discussions of the global economy, and fluctuations in oil prices frequently gain widespread attention. This column explores the impact of the rising use of fracking on how oil markets are best conceived within modern macroeconomic theory. The author's model predicts that as fracking accounts for an increasingly sizeable fraction of the world oil supply, it may herald a new era of lower, more stable oil prices.

Avinash Persaud, 23 February 2021

The switch to renewable energies is necessary for humanity’s future, but it is currently too slow. For developing countries, the critical obstacle is the pricing, ownership, land-use and approval processes renewable projects have to go through. This column argues that to bring dividends for sunnier, developing countries, provide more projects for green investors, and for some redemption for the rest of humanity, countries should (1) streamline the approval process, (2) broaden the ownership of assets through mandated initial public offerings and small-investor allocations while supporting big foreign investors in the short-run, and (3) offer an attractive feed-in tariff that predictably ratchets down in favour of consumers once investors reach their return threshold.

Hans Koster, Martijn Dröes, 20 September 2020

Countries that invest in renewable energy production face frequent opposition from local homeowners. Using a detailed housing transactions dataset covering the whole of the Netherlands since 1985, this column compares the overall impact that wind turbines and solar farms have on housing prices. It finds that tall wind turbines (over 150 metres) have a negative effect, and solar farms generate losses as well (2-3% for homeowners within a 1km orbit). This evidence should be factored into finding the optimal allocation of renewable energy production facilities. 

Jennifer Castle, David Hendry, 04 June 2020

The UK’s 2008 Climate Change Act has led to a 34% fall in CO2 emissions by 2019, while real GDP per capita had risen by more than 10% following the crash into the ‘Great Recession’. Can the UK achieve its recent net-zero emissions target by 2050 while still growing? This column describes some speculative routes to such a decarbonised future.

David Newbery, 20 July 2018

The cost of supporting the production of renewable energy seems eye-watering. This column argues, however, that the alternative of a future energy system lacking the benefits of low-cost zero-carbon technologies is even more costly. While most renewable technologies are not yet competitive on cost with mature carbon-intensive technologies, support for renewables can be justified by learning spillovers.

, 14 October 2016

What could the solutions for the global energy challenge be? In this video, Michael Greenstone discusses three aspects of this challenge. The video was recorded at the International Growth Centre.

Emanuele Massetti, Elena Ricci, 23 July 2014

Concentrated solar power generation in Northern African and Middle Eastern deserts could potentially supply up to 20% of European power demand. This column evaluates the technological, economic, and political feasibility of this idea. Although concentrated solar power is a proven technology that can work at scale, it is currently four or five times more expensive than fossil fuels. Concentrated solar power could play an important role in Europe’s energy mix after 2050, but only if geo-political challenges can be overcome.

Gilbert Metcalf, 26 January 2009

This column explains how US tax policies have induced greater investment in renewable energy production and an electricity grid unable to harness it. It argues for a tax code that offers financial incentives to make new grid investments, lest the US find itself with a power grid that can't transport green electricity to the nation's growth centres – the ultimate bridge to nowhere.

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