Energy

This image is having trouble loading!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.

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Frank Wolak discusses restructuring of the electricity industry in the U.S. using examples from California and explains the problems involved in energy market design.

Building 420, Room 40

Stanford University 
Economics Department 
579 Jane Stanford Way Stanford, CA 94305-6072 

Website: https://fawolak.org/

(650) 724-1712 (650) 724-1717
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Senior Fellow at the Freeman Spogli Institute for International Studies
Holbrook Working Professor of Commodity Price Studies in Economics
Senior Fellow, by courtesy, at the Stanford Institute for Economic Policy Research
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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.

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Jeremy Carl
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Jeremy Carl argues that despite India’s lack of a concrete binding target for significant CO2 emissions reductions, India’s climate commitments come through on other fronts.

Sometimes in diplomacy what is not announced is more revealing than what is. Such is certainly the case in India's recent climate and energy negotiations with the US, as both countries prepare to head to global climate talks in Copenhagen. The occasion of Manmohan Singh's state visit to the US brought the announcement of a flurry of energy and climate-related initiatives. These initiatives were a combination of substance and political theatre, with potentially important initiatives on environmental and regulatory capacity-building and technology partnerships buried under a deep layer of bureaucratic niceties.

What was more noticed was what was not announced: any agreement for India to have a binding target for CO2 emissions reductions, something US and European environmentalists have long claimed is necessary as part of a global effort to stave off severe climate change. And while the Indian government has eventually announced a targeted reduction in what is known as "emissions intensity", CO2 emissions per unit of GDP, that wasn't a big stretch, given India's current annual efficiency improvements. Furthermore, Minister for Environment and Forests Jairam Ramesh has made it abundantly clear in Parliament that such targets would be voluntary and not part of a binding international agreement.

With more than 60 world leaders in attendance, we can be assured that Copenhagen will not end in public failure. But the better question is whether the announced success in Copenhagen will have any practical meaning other than determining that diplomats can spin a "success" out of any actual events. Some Indian commentators have seemed to hope for a "success" of that sort - fretting about India being outmanoeuvred on the public stage by China and other developing countries that may be able to strike a more cooperative posture.

While from a tactical standpoint, such concerns are understandable (there is little reason for India to not commit to doing things it would like to do anyway, such as developing more efficient power plants or cars), from the perspective of actually taking leadership in addressing the climate problem, they mean little. In some ways, India is emulating the example of the US from the previous Kyoto climate round: while the US certainly should have been more proactive and engaged, at least the Americans had the integrity not to ratify an agreement that they couldn't keep. Many other nations could not claim that; they either missed their targets entirely, or resorted to bogus accounting tricks to meet their goals.

That India is showing its seriousness by not making climate commitments it won't live by should actually be seen as a mature and responsible decision, not an intransigent one. Does anyone think that China won't walk away from its promise if they have trouble meeting their emissions reduction goals?

As an alternative to the hot air that is likely to come out of Copenhagen, it is instructive to look at the potentially useful energy and climate agreements the US and India did sign during the PM's recent visit. The fact that clean energy was the second item listed behind security issues in the joint communiqué announced by Singh and Obama is clear evidence that both India and the US place a high importance on this aspect of their relationship.

India and the US announced numerous programmes, from the joint deployment of solar electricity in Indian cities to the strengthening of India's environmental regulatory and monitoring capacity - which is sure to be a critical step if India is to make serious and verifiable long-term commitments to emissions reductions. Perhaps most important, at least symbolically, was the announcement of joint scientific R&D work for renewable energy technologies. The Indo-US Clean Energy Research and Deployment Initiative, which promises joint development of new energy technologies and the development of a joint research centre with a public-private funding model, is one such initiative.

Ultimately, despite the bluster of diplomats in Delhi, Washington or Copenhagen, the solutions to the climate change problem must come through a technological revolution in the world's energy infrastructure. And it is here that India, with its burgeoning corps of bright young engineers, could make the biggest impact on climate change mitigation. Circumstances may not permit

India to lead the deal-making in Denmark, but if the Indian government gets serious about turning more of India's brightest young minds towards solving the clean energy problem, then India's contribution to solving the climate change conundrum may be significant indeed.

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Gang He and Richard Morse examine one of the biggest controversies in the global carbon market - the additionality of Chinese wind power in the Clean Development Mechanism (CDM).   Addressing and moving beyond the binary question of whether such projects do or do not represent "real" CO2 reductions, they use insights drawn from detailed analysis of the entire Chinese wind CDM portfolio to argue that the current legal and economic structure of additionality is unworkable in the Chinese power sector when one takes into account how regulation and policy in those markets actually function. 

Therefore under the current CDM additionality regime, additionality cannot be credibly verified for Chinese wind - a problem that extends to multiple types of energy projects in numerous developing countries.  In short, the controversy over Chinese wind illustrates the need for large-scale reforms of how the world validates carbon credits in developing world power sectors.  In a post-Kyoto world that envisions a greatly expanded role for international carbon offsets, ensuring the integrity of carbon markets through smarter policy engagement with countries like China is more important than ever.

Richard and Rhoda Goldman Conference Room

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E420 Encina Hall
Stanford, CA 94305

(650) 725-4249 (650) 724-1717
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Gang He's work focuses on China's energy and climate change policy, carbon capture and sequestration, domestic coal and power sectors and their key role in both the global coal market and in international climate policy framework.  He also studies other issues related to energy economics and modeling, global climate change and the development of lower-carbon energy sources. 

Prior to joining PESD, he was with the World Resources Institute as a Cynthia Helms Fellow.  He has also worked for the Global Roundtable on Climate Change of the Earth Institute at Columbia University. With his experiences both in US and China, he has been actively involved in the US-China collaboration on energy and climate change. 

Mr. He received an M.A. from Columbia University on Climate and Society, B.S. from Peking University on Geography, and he is currently doing a PhD in the Energy and Resources Group at UC Berkeley.

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The Global Village Energy project released a report tackling the question of why the adoption of improved cook stoves has been so slow in developing countries. Titled, "Three Key Obstacles to Cookstove Adoption (And How to Overcome Them)," it contains an article by PESD researcher Xander Slaski and Assistant Director Mark C. Thurber.
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PESD researchers Richard K. Morse and Gang He are in Copenhagen attending international climate negotiations at the UN's COP 15.  Key issues in PESD's research platform are prominently featured in the event: carbon capture and storage, reform of the clean development mechanism (CDM), Chinese energy markets, carbon markets,  the future of coal and gas and global emissions, the smart grid, and a host of other topics central to the future of the global energy system.  Richard and Gang are testing their latest research with some of the world's key decision markers on energy and climate and sharing Stanford and PESD insights in this global forum.

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Mark C. Thurber and Xander Slaski are currently in Pune and has met with First Energy (formerly BP emerging consumer markets) to better understand their business model, particularly around the supply network. Around Pune, Mark and Xander had the opportunity to see the stove production facility as well as the biomass processing plant. Extensive discussions with dealers and consumers were excellent opportunities to learn more about the factors underpinning demand.

Xander will be traveling to Delhi on December 12th and is scheduled to meet with members of the government to discuss the new Indian cookstove initiative as well as LPG policy, rural electrification, and the new solar mission. A key motivation for visiting Delhi is also to meet with staff at Philips, as they are in the preliminary stages of rolling out a commercial stove program. Xander will also be meeting with other organizations in Delhi involved in low-income energy services, including TERI.

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The article discusses the role of commercial ventures in improving access to improved biomass stoves. The key point of the article is that there are three main components to a successful cookstove program (for-profit or not). Stoves need to be desirable, affordable, and require minimal change in lifestyle. In order for stoves to be adopted, all three components must be in place.

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Global Village Energy Partnership International
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Xander Slaski
Mark C. Thurber
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In a new article in the Fall 2009 issue of the Harvard International Review PESD research fellow Varun Rai discusses the critical elements of effective international carbon offsets markets. The article argues that fundamental problems of perverse incentives and huge transaction costs render the clean development mechanism (CDM) unfit as the backbone of international carbon offsets markets post-2012. Instead, the article emphasizes the need for multilateral deals around large sectors that leverage synergies between climate change benefits and the core interests of developing countries.
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VRai HIR Spotlight Oct 09
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