The economist and HKS professor is passionate about solving what may be humanity's most important and perplexing problem: How to untangle fossil fuels from the global economy.

As governments, firms, and universities advance ambitious greenhouse gas emission goals, the demand for emission offsets — projects that reduce or remove emissions relative to a counterfactual scenario — will increase. Reservations about an offset’s additionality, permanence, double-counting, and leakage pose environmental, economic, and political challenges. The authors review the role of offsets in regulatory compliance, as an incentive for early action, and in implementing voluntary emission goals

Professors David Keith and Joseph Aldy and their co-authors say deeper social science research could contribute to policy decisions on this tool to address climate change.

Joseph Aldy describes how the United States can work toward its ambitious climate goals and ensure a level playing field for U.S. businesses by using countervailing duties under international trade law, without the need for new legislation.

Joseph Aldy describes the challenge of reforming fossil fuel subsidies, given uncertainty about how much subsidies actually cost governments and given provisions in the US tax code that privilege fossil fuels over renewable energy sources. Aldy also elaborates on some policies that the Biden administration—which has committed to removing fossil fuel subsidies—could target as policymakers develop infrastructure legislation.

Joseph Aldy and Richard Zeckhauser advocate for urgently getting serious about solar geoengineering as a realistic response to climate change that could significantly curb consequences to human well-being.

The United States and United Kingdom have longstanding traditions in use of environmental benefit-cost analysis (E-BCA). While there are similarities between how E-BCA is utilized, there are significant differences too, many of which mirror ongoing debates and recent developments in the literature on environmental and natural resource economics. We review the use of E-BCA in both countries across three themes: (a) the role of long-term discounting; (b) the estimation and use of carbon valuation; and, (c) the estimation and use of the value of a statistical life. 

This paper considers the treatment of co-benefits in benefit-cost analysis of federal air quality regulations. Using a comprehensive data set on all major Clean Air Act rules issued by the Environmental Protection Agency over the period 1997–2019, the authors show that (1) co-benefits make up a significant share of the monetized benefits; (2) among the categories of co-benefits, those associated with reductions in fine particulate matter are the most significant; and (3) co-benefits have been pivotal to the quantified net benefit calculation in nearly half of cases.

Professor Joseph Aldy says the incoming U.S. administration can breathe new life into global efforts against climate change, but faces daunting political and economic obstacles.

Joseph Aldy advocates for a carbon-price benchmark — which could be set initially at $50 per ton and rise over time — that would reflect the benefits of reducing the pollution causing climate change.