PESD Director David G. Victor will be teaching "The Political Economy of Energy Policy" in the upcoming winter quarter. The class will introduce students to the major theoretical frameworks used by political scientists, sociologists, economists, and other intellectual disciplines to understand how societies design and implement public policies related to energy, and how the energy industry responds. Topics covered will include theories of the state, monopoly and regulation, public choice, organizational behavior, international agreements, and innovation.  The class will apply these theories to major current and historical issues in energy policy, such as ethanol, climate change, energy security, the role of national oil companies in the world oil market, the functioning of OPEC, and the California electricity crisis.

In an article published by UPenn's Center for the Advanced Study of India (CASI), PESD research fellow Dr. Varun Rai reports on the positive impact that India's major energy policy reforms have had since 1998. Rai asserts that these policies are the right platform for India's energy future: they will provide enough transparency and the right economic signals leading to the emergence of an efficient energy system in India. He also draws particular attention to the organizational instability facing the operationally-constrained state-owned firms that are exposed to market competition and to the dangers of decision-making without due consideration of the global dimensions of energy.

Based on an analysis of a rural household survey data in Hubei province in 2004, we explore patterns of residential fuel use within the conceptual framework of fuel switching using statistical approaches.

Cross sectional data show that the transition from biomass to modern commercial sources is still at an early stage, incomes may have to rise substantially in order for absolute biomass use to fall, and residential fuel use varies tremendously across geographic regions due to disparities in availability of different energy sources. Regression analysis using logistic and tobit models suggest that income, fuel prices, demographic characteristics, and topography have significant effects on fuel switching. Moreover, while switching is occurring, the commercial energy source which appears to be the principal substitute for biomass in rural households is coal. Given that burning coal in the household is a major contributor to general air pollution in China and to negative health outcomes due to indoor air pollution, further transition to modern and clean fuels such as biogas, LPG, natural gas and electricity is important. Further income growth induced by New Countryside Construction and improvement of modern and clean energy accessibility will play a critical role in the switching process.