Header image of the Tilburg Law and Economics Center (TILEC)

Tilburg Law and Economics Center

TILEC supports and stimulates academic research on the governance of economic activity. It fosters academically path breaking and practically relevant research and aims to be a leading center worldwide.

TILEC Seminar: Meredith Fowlie (Berkeley, University of California) Measuring and Mitigating Greenhouse Gas Emissions Leakage

10:45-11:45, M 1003

Meredith Fowlie is an Associate Professor in the Department of Agricultural and Resource Economics and holds the Class of 1935 Endowed Chair in Energy at UC Berkeley. She is also a research associate at UC Berkeley's Energy Institute at Haas and the National Bureau of Economic Research.  

She is an applied economist working at the intersection of industrial organization, energy markets, and environmental economics. Much of my work investigates how market-based environmental regulation- and emissions trading programs in particular- are working in practice. I am also interested in the demand-side of energy markets and work that integrates methods and models from other disciplines into economic analysis of policy outcomes.

Measuring Leakage Risk with Mar Reguant of Northwestern University

When a policy regulating greenhouse gas emissions applies to only a subset of emitting sources,  a policy-induced shift in economic  activity to unregulated sources can substantially undermine policy effectiveness via emissions  “leakage”. Output-based rebating of compliance costs has emerged as a preferred approach to mitigating this leakage risk. Output-based rebates, which act as  a production subsidy,  have potentially significant implications for both economic efficiency and the distribution of policy impacts.  It is therefore important to judiciously target these subsidies to those industries truly at leakage risk.  We provide a theoretically sound basis for deriving industry-specific, output-based subsidies under different policy objective functions. We show how the optimal industry-specific subsidies depend on both the emissions intensity of foreign production and the responsiveness of trade flows to policy-induced changes in domestic production. Using rich transaction and firm-level data from the U.S.  Census, we calibrate industry-specific, output-based subsidies for manufacturing sectors in the United  States.   We assess the efficiency and distributional implications of implementing a domestic carbon policy with and without these leakage mitigation provisions.

When: 28 February 2018 10:45

End date: 28 February 2018 11:45

Where: Montesquieu building