FSI researchers examine the role of energy sources from regulatory, economic and societal angles. The Program on Energy and Sustainable Development (PESD) investigates how the production and consumption of energy affect human welfare and environmental quality. Professors assess natural gas and coal markets, as well as the smart energy grid and how to create effective climate policy in an imperfect world. This includes how state-owned enterprises – like oil companies – affect energy markets around the world. Regulatory barriers are examined for understanding obstacles to lowering carbon in energy services. Realistic cap and trade policies in California are studied, as is the creation of a giant coal market in China.
In electricity, "downstream" CO2 regulation requires retail suppliers to buy energy from a mix of sources so that their weighted emissions satisfy a standard. It has been argued that such "loadbased" regulation would solve emissions leakage, cost consumers less, and provide more incentive for energy efficiency than traditional source-based cap-and-trade programs. Because pure load-based trading complicates spot power markets, variants (GEAC and CO2RC) that separate emissions attributes from energy have been proposed. When all energy producers and consumers come under such a system, these load-based programs are equivalent to source-based trading in which emissions allowances are allocated by various rules, and have no necessary cost advantage. The GEAC and CO2RC systems are equivalent to giving allowances free to generators, and requiring consumers either to subsidize generation or buy back excess allowances, respectively. As avoided energy costs under source-based and pure load-based trading are equal, the latter provides no additional incentive for energy efficiency. The speculative benefits of load-based systems are unjustified in light of their additional administrative complexity and cost, the threat that they pose to the competitiveness and efficiency of electricity spot markets, and the complications that would arise when transition to a federal cap-and-trade system occurs.
The Clean Development Mechanism (CDM) is the leading international carbon market and a driving force for sustainable development globally. But the eruption of controversy over offsets from Chinese wind power has exposed cracks at the core of how carbon credits are verified in developing economies. It has become almost impossible to determine whether offsets from Chinese wind are "additional" and that they in fact represent "real" reductions beyond business as usual. Unless this problem can be resolved, it threatens to spread beyond wind in China and could threaten the ability of carbon markets to deliver the mitigation demanded by international climate policy.
In 2009 the CDM Executive Board (EB) shocked the carbon market by forcing an unprecedented review of whether multiple Chinese wind projects satisfied UNFCCC additionality requirements. CDM investors reeled as the safest CDM bet became the riskiest; the Chinese government publicly criticized the UN's oversight of carbon markets; and the CDM EB prepared itself for an unprecedented fight over how carbon offsets could be verified in the world's largest CDM market.
At the center of the controversy is the Chinese power tariff for wind.
When the EB observed decreases over time in power tariffs granted by China's National Development and Reform Commission (NDRC) to wind projects, it became concerned that China might be manipulating power tariffs in order to guarantee additionality and subsidize its domestic wind development with international finance. If the Chinese government were controlling additionality, then the CDM's ability to validate carbon offsets would be dealt a near‐lethal blow because the problems posed by Chinese wind extend to nearly all power sector projects in almost every developing country. If offsets cannot be credibly verified, then the integrity of emissions caps set by the Kyoto Protocol is directly threatened.
The Chinese wind controversy therefore has direct implications for the design and negotiation of any successor to the Kyoto Protocol. Despite largely failed negotiations in Copenhagen, the design of reliable, efficient carbon markets remains the world's most serious prospect for international cooperation. The developed world has committed USD 30 billion in climate aid by 2012, but the majority of these funds will likely have to be private capital delivered through markets. In order for carbon markets to avoid controversy and function effectively, the lessons from the Chinese wind controversy must be used to implement key reforms.
This report examines the application of additionality in the Chinese wind power market and draws implications for the design of effective global carbon offset policy. It demonstrates the causes of the wind power controversy, highlights underlying structural flaws in how additionality is applied in China, and charts a reform path that can strengthen the credibility of global carbon markets.
Korean Studies Program at the Shorenstein Asia-Pacific Research Center is hosting an international workshop on South Korean economic affairs on March 18-19 sponsored by Koret Foundation. Leading scholars and former senior officials from Korea and the United States will explore key aspects of economic globalization and Korea's role, from policies and politics to the economic prospects of a unified Korean. This lecture is offered as a public event on the first day of the workshop for a larger audience from the community and the Bay area.
Ambassador Han was appointed by President Lee, Myung-bak as the new Ambassador Extraordinary and Plenipotentiary to the United States of the America on January 18, 2009. He presented his Letter of Credence to President Barack Obama on May 20, 2009.
Before the appointment, Ambassador Han served as the 38th Prime Minister of the Republic of Korea after his nomination was approved by the National Assembly on April 2, 2007, and he worked in that capacity until February 2008.
Prior to serving as Prime Minister, Ambassador Han held numerous high-ranking positions in the Korean government. In 2006, he was named Chairman of the Presidential Committee on Facilitating KORUS FTA following his service as Deputy Prime Minister and Minister of Finance and Economy. Before being named Minister of Government Policy Coordination in early 2004, he worked as President of the Korea Institute for Industrial Economics and Trade.
As Korea’s Permanent Representative to the Organisation for Economic Co-operation and Development, Ambassador Han went to Paris in 2001 before returning to Seoul later that year to serve at the Blue House, first as Senior Secretary to the President for Policy and Planning and later as Senior Secretary to the President for Economic Affairs.
Ambassador Han was the Minister for Trade at the Ministry of Foreign Affairs and Trade from 1998 to 2001. Previously, he was Assistant Minister for International Trade and Vice Minister at the Ministry of Trade, Industry and Energy. From 1993 to 1994, he served as Secretary to the President for Economic Affairs.
During his distinguished career in government, Ambassador Han has made many contributions to the development and modernization of the Korean economy. Deregulation, market opening and strengthening of the market economy have been the three pillars of his philosophy and framework for the economic policy of Korea.
Ambassador Han earned a B.A. in economics from Seoul National University, and an M.A. and Ph.D. in economics from Harvard University. He has been awarded two Order of Public Service and Merit Medals.
This event is supported by a generous grant from the Koret Foundation.
Bechtel Conference Center
UC Berkeley's the Energy Institute at Haas holds an annual research conference on energy research and policy. This event brings together scholars and practitioners to exchange research results, ideas, and thoughts on topics related to electricity markets and regulation.
Frank Wolak is scheduled to speak during the Consumer Response to Retail Electricity Pricing section of the conference, titled "An Experimental Comparison of Critical Peak and Real-Time Pricing."
Chevron Auditorium, International House
University of California, Berkeley
2299 Piedmont Avenue
Berkeley, CA 94720-2320
Stanford University
Economics Department
579 Jane Stanford Way Stanford, CA 94305-6072
Website: https://fawolak.org/
Frank A. Wolak is a Professor in the Department of Economics at Stanford University. His fields of specialization are Industrial Organization and Econometric Theory. His recent work studies methods for introducing competition into infrastructure industries -- telecommunications, electricity, water delivery and postal delivery services -- and on assessing the impacts of these competition policies on consumer and producer welfare. He is the Chairman of the Market Surveillance Committee of the California Independent System Operator for electricity supply industry in California. He is a visiting scholar at University of California Energy Institute and a Research Associate of the National Bureau of Economic Research (NBER).
Professor Wolak received his Ph.D. and M.S. from Harvard University and his B.A. from Rice University.
Proponents of public subsidies to renewable energy technologies often claim that subsidizing renewables today accelerates their realization of cost reductions in the future on account of learning-by-doing. A number of previous studies claim to find evidence that certain renewable energy technologies are characterized by statistically and economically significant learning effects; however, these studies assume away potentially important channels of cost reductions besides learning. John's paper uses data for the U.S. wind energy industry to show the implications of the assumptions implicit in previous studies of learning in renewable energy technologies.
Encina Hall East
PESD Assistant Director Mark Thurber will be presenting a paper on oil governance at the International Studies Association 51st annual convention, "Theory vs. Policy? Connecting Scholars and Practitioners."
In the paper, which is entitled "The Limits of Institutional Design in Oil Sector Governance: Exporting the ‘Norwegian Model,'" Mark and his co-authors (PESD affiliated researchers David Hults and Patrick Heller) draw examples from PESD's larger study of national oil companies to argue that separating policy, regulatory, and commercial functions in oil administration works well in Norway but is not the best prescription for all oil-producing countries. As the premiere annual event of the ISA, which is the most widely known and respected scholarly association in the field of international studies, the conference in New Orleans attracts participants from around the world.
New Orleans, LA
Program on Energy and Sustainable Development
616 Jane Stanford Way
Encina Hall East, Rm E412
Stanford, CA 94305
Mark C. Thurber is Associate Director of the Program on Energy and Sustainable Development (PESD) at Stanford University, where he studies and teaches about energy and environmental markets and policy. Dr. Thurber has written and edited books and articles on topics including global fossil fuel markets, climate policy, integration of renewable energy into electricity markets, and provision of energy services to low-income populations.
Dr. Thurber co-edited and contributed to Oil and Governance: State-owned Enterprises and the World Energy Supply (Cambridge University Press, 2012) and The Global Coal Market: Supplying the Major Fuel for Emerging Economies (Cambridge University Press, 2015). He is the author of Coal (Polity Press, 2019) about why coal has thus far remained the preeminent fuel for electricity generation around the world despite its negative impacts on local air quality and the global climate.
Dr. Thurber teaches a course on energy markets and policy at Stanford, in which he runs a game-based simulation of electricity, carbon, and renewable energy markets. With Dr. Frank Wolak, he also conducts game-based workshops for policymakers and regulators. These workshops explore timely policy topics including how to ensure resource adequacy in a world with very high shares of renewable energy generation.
Dr. Thurber has previous experience working in high-tech industry. From 2003-2005, he was an engineering manager at a plant in Guadalajara, México that manufactured hard disk drive heads. He holds a Ph.D. from Stanford University and a B.S.E. from Princeton University.
Megan Smith, Vice President, New Business Development and General Manager, Google.org., argued that greater interconnectedness achieved by information technology is a major liberating force in the world. Whether it is aiding the coordination of protests or increasing transparency of governments, the exchange of information has huge benefits. This is not a new phenomenon. In places where people have been able to exchange information easily, social progress has followed. Megan cited the example of Seneca Falls, New York where the canal system allowed for extensive communication; it became significant in both the women's rights and abolition movements.
While a large proportion of the world is benefiting from greater interconnectedness, Africa still lacks the infrastructure to take full advantage. Submarine fiber optic cables are necessary for quick and cheap internet cables and many African countries, particularly in the east, are not connected to these, relying instead on satellites. This is likely to change over the next few years, bringing great potential for further development.
The mission of Google.org is to use technology to drive solutions to global challenges such as climate change, pandemic disease and poverty. The organization was set up as part of a commitment to devote approximately one percent of Google's equity plus one percent of annual profits to philanthropy, along with employee time. Google.org now places its strategic focus on those projects that can leverage the resources of Google staff, particularly its engineers.
Current projects that harness the power of information include:
