International Development

FSI researchers consider international development from a variety of angles. They analyze ideas such as how public action and good governance are cornerstones of economic prosperity in Mexico and how investments in high school education will improve China’s economy.

They are looking at novel technological interventions to improve rural livelihoods, like the development implications of solar power-generated crop growing in Northern Benin.

FSI academics also assess which political processes yield better access to public services, particularly in developing countries. With a focus on health care, researchers have studied the political incentives to embrace UNICEF’s child survival efforts and how a well-run anti-alcohol policy in Russia affected mortality rates.

FSI’s work on international development also includes training the next generation of leaders through pre- and post-doctoral fellowships as well as the Draper Hills Summer Fellows Program.

Program on Energy and Sustainable Development
Encina Hall East, E420
Stanford, CA 94305-6055

(650) 723-8372 (650) 724-1717
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Research Associate

Ngai-Chi Chung manages PESD's efforts on investigating the developing industry of carbon storage. His focus is on investigating the commercial viability of carbon storage projects and the business models, and the management of financial and regulatory risks behind the carbon storage projects.

Ngai-Chi Chung joined PESD in October 2007. He has a B.S. with distinction in Civil Engineering and a M.S. in Management Science and Engineering from Stanford University. He has worked as an Associate Consultant for Marakon Associates, with client experience including a major U.S. automotive manufacturer and a major European energy utility.

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Abstract

The experience of the past ten years suggests that the potential benefits from electricity industry restructuring are small relative to those that can be achieved from introducing competition into other network industries such as telecommunications and airlines. In addition, the probability of a costly market failure in the electricity supply industry, often due to the exercise of unilateral market power, appears to be significantly higher than in other network industries.

A major theme of this chapter is that electricity industry re-structuring is an evolving process that requires market designers to choose between an imperfectly competitive market and an imperfect regulatory process to provide incentives for least-cost supply at various of stages of the production process. The fundamental goal of the market design process in the wholesale market regime is to limit the ability of suppliers to exercise unilateral market power either explicitly through market price-setting mechanisms or implicitly through the regulatory price-setting process.

There are a number ways the regulator can limit the ability of suppliers to exercise unilateral market power-namely, (1) alter the market structure, (2) change market rules, (3) impose penalties and sanctions on market participants for their behavior, and (4) even explicitly set the prices that market participants receive for their production. This chapter provides a theoretical framework for understanding how to make these choices in order to design a wholesale market that benefits consumers relative to the former vertically-integrated utility regime. The paper uses this framework to understand the causes of the disappointing experience with wholesale electricity restructuring in the US. This discussion points to a number of ways to increase the likelihood that restructuring in the US will ultimately benefit consumers.

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Stanford University, Department of Economics
Authors
Frank Wolak

The PESD's 2007 Annual Review Meeting, which will be held November 13-14, 2007 at Stanford University, provides the opportunity to take a look at major issues in the world's energy system, as well as PESD's current research and plans for the future.

PESD is a growing international research program that works on the political economy of energy. We study the political, legal, and institutional factors that affect outcomes in global energy markets. Much of our research has been based on field studies in developing countries including China, India, Brazil, South Africa, and Mexico.

At present, PESD is active in four major areas: climate change policy, energy and development, the emerging global natural gas market, and the role of national oil companies.

We have made available the agenda with more detail on the event. The substance of the workshop will begin at 1pm on Tuesday, November 13, with an overview of the program. Then we will focus the rest of the time on a few main research topics, discussing the current state of research for each as well as our plans for the future. We also anticipate discussion of areas where PESD can better collaborate with other institutions. The meeting ends at 1pm on Wednesday, November 14.

Schwab Center
680 Serra Street
Stanford, CA 94305-6090

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Clean coal is a possible answer for China and India, says Jeremy Carl, a PhD student in the Interdisciplinary Graduate Program in Environment and Resources at Stanford and a fellow at the Program on Energy and Sustainable Development (PESD). Carl describes clean coal options from desulfurization to integrated gasification-combined-cycle (IGCC) plants to carbon capture and sequestration.

Coal is dirty. But coal is driving the U.S., Chinese and Indian economies. And therefore, coal is not going away. Renewable energy sources like solar and wind generate only 1 percent of the world's electricity. Do the math: Making coal burn cleaner might be the most pressing environmental problem that no one talks about.

Despite recent estimates that pollution from China's booming coal industry reaches U.S. shores in as little as five days, the green-tech investment boom that has funded the rise of biofuels has bypassed coal. Even the head of the World Coal Institute recently proclaimed the last 10 years "a lost decade" for clean coal, saying it's time to play catch-up.

Stanford's Jeremy Carl, a research fellow in the Program on Energy and Sustainable Development, couldn't agree more. He spoke on the phone with Wired News to discuss China, the holy grail of clean coal and how many coal plants he'd trade for Kyoto's accomplishments.

Stanford research fellow Jeremy Carl says, "Coal is as dirty as it gets," but warns against throwing the possibly cleaned-up baby out with the dirty bathwater.

Wired News: Why'd you get into clean coal?

Jeremy Carl: I looked at the numbers. It's a question of where the big sources of emissions are and where we can attack them.

WN: Can you give us an idea of the scale of coal power? Can you put coal in context as an energy source?

Carl: Only oil makes a bigger contribution to global energy. In terms of energy in the industrial world, it's about 40 percent of electricity production.

WN: How dirty is coal?

Carl: Coal is as dirty as it gets. Coal has every element in the periodic table. And depending where in the world you get it from, "coal" can mean 100 different substances. If you sent the sort of coal you might use in a typical Indian plant to a supermodern boiler in Japan, it would shut the place down.

WN: But there's got to be good things about coal.

Carl: It's cheap. And coal doesn't have the kind of extreme risk that nuclear power has. You're not going to build a dirty bomb out of coal. And unlike other fossil fuels, it is really widely distributed, so there is less of a coal OPEC.

WN: And that distribution would seem to make resource wars less likely to break out over coal?

Carl: Yes.

WN: Is there an energy source that could replace coal?

Carl: Natural gas is the only viable replacement, and it's not clear that the natural-gas supply could scale up to replace coal.

WN: So, how can we can make coal cleaner?

Carl: The most-well-known is flue-gas desulfurization, which takes sulfur dioxide out of smoke stacks, and came out of concerns about acid rain. There are other pollution-control devices for nitrogen oxide and mercury filters.

WN: What about up-and-coming technologies like carbon capture and sequestration? Can you tell us about that?

Carl: You're taking carbon from a smokestack and pressure-injecting it into a geological formation of some sort. We actually already do this process at an industrial level. We know how this works.

WN: Seems like we're spending a lot of time on the backend scrubbing pollutants out. Should we be designing in a cleaner process on the front end?

Carl: A lot of people point to integrated gasification-combined-cycle (IGCC) plants, which gasify coal before burning it, as the holy grail because they get you a cleaner process. It gives you a more concentrated stream of carbon that you can sequester underground more cheaply. The capital cost is very high, though, and we don't have a lot of experience in designing them.

WN: We hear a lot about China's coal industry. Can you compare it with the U.S. industry, which ranks second in the world?

Carl: We mine about (1.1 billion tons) of coal per year. China was at about 1.4 billion tons seven years ago. Now they are at 2.4 billion tons. So, they essentially took the second-biggest coal industry in the whole world and replicated it in seven years. And if you look at the Chinese plans, they plan to ramp it up even more in the future.

WN: Given the obvious environmental impacts of these plants, why don't we have better answers for these problems than the Kyoto Protocol (which the United States didn't sign, and which exempted China and India from emissions restrictions)?

Carl: I'll give you a speculative, personal answer. It has to do with the politics of the type of people who were negotiating Kyoto. And the pressure put on by environmental groups that were uncomfortable with coal. There was just so much pressure on the symbolic importance of getting a deal done.

WN: What would you have rather seen?

Carl: I think there has been some really good criticism that says, "Was the U.N. really a good forum for this? Or would it have been better to have taken the 10 countries who consume 60 percent of global energy and do something with real teeth in it?" I think that would have been a much better approach.

I would have happily traded every emissions gain from Kyoto for eight clean coal plants sequestering carbon in different countries. Because then we could have a real discussion that says, "This works. Now let's see who has to bear the cost."

WN: Why would that be such a big deal?

Carl: Because right now we're having a conversation with China and India where we're trying to get China and India to build clean coal plants by saying, "Here's this thing that's never been tried before at a mass scale. You should build one." And that's not going to work.

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PESD has concluded a two year collaborative study on the Indian natural gas market with three India research groups- A.T. Kearney, Indian Institute of Management - Ahmedabad, and Integrated Research and Action for Development (IRADe). The study explores gas demand to the year 2025 in the three main gas consuming sectors within India - electricity generation, nitrogenous fertilizer production, and industrial applications - under a range of different policy and economic scenarios.

The study concludes that coal is likely to remain the dominant fuel in the power sector, but opportunities exist for gas in reducing regional air pollution and providing peaking power. For the fertilizer sector, significant opportunities exist to import cheap fertilizer, thereby reducing domestic gas demand, but political constraints will likely buoy gas demand. Industrial consumers will benefit from increased supplies from LNG to displace expensive liquid fuels, but cheap coal remains the dominant fuel for many industrial applications.

Regional air pollution constraints in the power sector - already underway in certain parts of India could reduce carbon dioxide emissions by over 100 million tonnes per year. Reforms underway in the Indian coal sector, however, could bring a surge in new supplies, which would undermine the opportunities for gas in the power sector.

From an international supply standpoint, India doesn't appear able to guarantee the offtake of a proposed large natural gas pipeline from Iran within the next 10-15 years, making the project very difficult to justify from a financial risk standpoint.

Seminars
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The Program on Energy and Sustainable Development and the Department of Energy Resources Engineering host this discussion with Thamir Abbas Ghadhban on the state of Iraqi oil. Mr. Ghadhban will present before a discussion with moderators Lou Durlofsky and David Victor, followed by a Q&A with the audience.

After the fall of the Iraqi regime in April 2003, Mr. Ghadhban took initiative to play a leading role in managing the severely damaged Iraqi oil industry. He became CEO of the Ministry of Oil in 2003 and later Minister of Oil in June 2004 through May 2005.

On January 30, 2005, Thamir Ghadhban was elected for membership to the Iraq National Assembly and became a member of the constitutional and economic committees. The next year he continued his service by becoming advisor to the Vice President in March 2006. Currently, he advises the Iraqi Prime Minister on oil and energy.

Author & co-author of more than fifty studies and technical papers dealing with various aspects of Iraqi oil fields in addition to several published papers about Iraq's oil industry, Thamir Ghadhban holds a B.Sc. in Geology from University College and an M.Sc in Petroleum Reservoir Engineering from the Imperial College, London University. He has worked in Iraqi oil since 1973.

Clark Center Auditorium
James H. Clark Center
318 Campus Drive
Stanford University

School of International Relations and Pacific Studies
UC San Diego
San Diego, CA

(858) 534-3254
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Professor at the School of International Relations and Pacific Studies and Director of the School’s new Laboratory on International Law and Regulation
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David G. Victor Commentator
Lou Durlofsky Professor of Energy Resources Engineering Commentator
Panel Discussions
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PESD has concluded a two year collaborative study on the Indian natural gas market with A.T. Kearney. The study explores gas demand to the year 2025 in industrial applications under a range of different policy and economic scenarios.

Industrial consumers will benefit from increased supplies from LNG to displace expensive liquid fuels, but cheap coal remains the dominant fuel for many industrial applications.

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Working Papers
Publication Date
Journal Publisher
Program on Energy and Sustainable Development Working Paper #68
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PESD has concluded a two year collaborative study on the Indian natural gas market with the Integrated Research and Action for Development (IRADe). The study explores gas demand to the year 2025 in nitrogenous fertilizer production under a range of different policy and economic scenarios.

For the fertilizer sector, significant opportunities exist to import cheap fertilizer, thereby reducing domestic gas demand, but political constraints will likely buoy gas demand. Industrial consumers will benefit from increased supplies from LNG to displace expensive liquid fuels, but cheap coal remains the dominant fuel for many industrial applications.

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1
Publication Type
Working Papers
Publication Date
Journal Publisher
Program on Energy and Sustainable Development Working Paper #67
Paragraphs

PESD has concluded a two year collaborative study on the Indian natural gas market with the Indian Institute of Management - Ahmedabad. The study explores gas demand to the year 2025 in the electricity sector under a range of different policy and economic scenarios.

The study concludes that coal is likely to remain the dominant fuel in the power sector, but opportunities exist for gas in reducing regional air pollution and providing peaking power.

Regional air pollution constraints in the power sector - already underway in certain parts of India could reduce carbon dioxide emissions by over 100 million tonnes per year. Reforms underway in the Indian coal sector, however, could bring a surge in new supplies, which would undermine the opportunities for gas in the power sector.

All Publications button
1
Publication Type
Working Papers
Publication Date
Journal Publisher
Program on Energy and Sustainable Development Working Paper #66
Authors
David G. Victor
Paragraphs

PESD has concluded a two year collaborative study on the Indian natural gas market with three India research groups- A.T. Kearney, Indian Institute of Management - Ahmedabad, and Integrated Research and Action for Development (IRADe). The study explores gas demand to the year 2025 in the three main gas consuming sectors within India - electricity generation, nitrogenous fertilizer production, and industrial applications - under a range of different policy and economic scenarios.

The study concludes that coal is likely to remain the dominant fuel in the power sector, but opportunities exist for gas in reducing regional air pollution and providing peaking power. For the fertilizer sector, significant opportunities exist to import cheap fertilizer, thereby reducing domestic gas demand, but political constraints will likely buoy gas demand. Industrial consumers will benefit from increased supplies from LNG to displace expensive liquid fuels, but cheap coal remains the dominant fuel for many industrial applications.

Regional air pollution constraints in the power sector - already underway in certain parts of India could reduce carbon dioxide emissions by over 100 million tonnes per year. Reforms underway in the Indian coal sector, however, could bring a surge in new supplies, which would undermine the opportunities for gas in the power sector.

From an international supply standpoint, India doesn't appear able to guarantee the offtake of a proposed large natural gas pipeline from Iran within the next 10-15 years, making the project very difficult to justify from a financial risk standpoint.

All Publications button
1
Publication Type
Working Papers
Publication Date
Journal Publisher
Program on Energy and Sustainable Development Working Paper #65
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