Energy

The Danish Minister of Climate, Energy, and Utilities expressed his hope that the tragic war in Ukraine will help accelerate the clean energy transformation by weaning Europe off Russian gas during a Virtual Forum (view recording here) last Friday (April 8). The event was hosted by the Harvard Project on Climate Agreements (HPCA) and moderated by Robert Stavins, HPCA Director and A.J. Meyer Professor of Energy and Economic Development. 

Guangdong Province ranks first in economic output among China’s provinces and will play a major role in achieving China’s national climate-change goals. This paper examines the progress of Guangdong Province’s carbon dioxide emissions trading system (ETS) in reducing emissions; design features of the system; challenges it faces with regard to further development; and its relationship to China’s new national ETS.

A generation of great international economists is passing from the scene.  Richard Cooper died on December 23. An American, he was teaching his classes at Harvard until the very end. Robert Mundell, passed away on April 4.  Originally Canadian, he was a winner of the Nobel Prize in economics.  And John Williamson, on April 11. Originally British, he had been the first scholar hired by the Peterson Institute for International Economics.

In this report, we propose a market reform pathway for Yunnan that is both feasible and applicable to address some of these challenges immediately, while aiming for a standard design based on well-documented international experience. Our proposal includes at its heart a pay-for-performance monthly capacity auction that can help cover revenue deficiencies in the energy market. Building on international experience with capacity markets, this approach provides incentives for availability when generation is needed most and is compatible with the adoption of a single energy market for all electricity resources. Out-of-market payments to cover stranded costs of certain firms can thus be minimized. Finally, engaging consumers in both these energy and capacity markets can create high-powered incentives to shift consumption to low-cost months and hours, benefitting the entire province.