Kenneth Gillingham

Yale University | YU

The economics of climate change involves a vast array of uncertainties, complicating our understanding of climate change. This study explores uncertainty in baseline trajectories using multiple integrated assessment models commonly used in climate policy development. The study examines model and parametric uncertainties for population, total factor...

About 40% of all coal mined in the United States is extracted from lands owned by the federal government, under leases managed by the U.S. Department of the Interior (DOI). Burning that coal accounts for 13% of U.S. energy-related greenhouse gas (GHG) emissions ( 1 ). With the largest and lowest-cost reserves in the United States, federal coal alon...

Solar photovoltaic (PV) system prices in the United States display considerable heterogeneity both across geographic locations and within a given location. Such heterogeneity may arise due to state and federal policies, differences in market structure, and other factors that influence demand and costs. This paper examines the relative importance of...

What do we know about the size of the rebound effect, the well-known phenomenon that improving energy efficiency may save less energy than expected due to a rebound of energy use? Is there any validity to the claims that energy efficiency improvements can actually lead to an increase in energy use (known as backfire)? This article clarifies what th...

The economics of climate change involves a vast array of uncertainties, complicating both the analysis and development of climate policy. This study presents the results of the first comprehensive study of uncertainty in climate change using multiple integrated assessment models. The study looks at model and parametric uncertainties for population,...

The social cost of carbon (SCC) is a crucial tool for economic analysis of climate policies. The SCC estimates the dollar value of reduced climate change damages associated with a one-metric-ton reduction in carbon dioxide (CO2) emissions. Although the conceptual basis, challenges, and merits of the SCC are well established, its use in government c...

The diffusion of new technologies is often mediated by spatial and socioeconomic factors. This article empirically examines the diffusion of an important renewable energy technology: residential solar photovoltaic (PV) systems. Using detailed data on PV installations in Connecticut, we identify the spatial patterns of diffusion, which indicate cons...

The solar photovoltaic (PV) industry in the United States has been the recipient of billions of dollars of subsidies at the federal and state level, often motivated by environmental externalities and dynamic spillovers from learning-by-doing in the installation of the technology. This paper investigates cost reductions due to learning-by doing (LBD...

The quantity of primary energy needed to support global human activity is in large part determined by how efficiently that energy is converted to a useful form. We estimate the system-level life-cycle energy efficiency (EF) and carbon intensity (CI) across primary resources for 2005-2100. Our results underscore that although technological improveme...

The failure of consumers to make seemingly cost-effective investments in energy efficiency is commonly referred to as the energy efficiency gap. We review the most recent literature relevant to the energy efficiency gap and in particular discuss what the latest insights from behavioral economics might mean for the gap. We find that engineering stud...

This paper reviews the major barriers to the adoption of low-carbon technologies, with a focus on market failures that provide a rationale for policy intervention to improve economic efficiency. Market failures include externalities, asymmetric information, institutional failures, regulatory failures, and failures of consumer or firm decision-makin...

Increasing energy efficiency brings emissions savings. Claims that it backfires are a distraction, say Kenneth Gillingham and colleagues.

There have been dramatic swings in retail gasoline prices over the past decade, along with reports in the media of consumers changing their driving habits — providing a unique opportunity to examine how consumers respond to changes in gasoline prices. This paper exploits a unique and extremely rich vehicle-level dataset of all new vehicles register...

Social interaction (peer) effects are recognized as a potentially important factor in the diffusion of new products. In the case of environmentally friendly goods or technologies, both marketers and policy makers are interested in the presence of causal peer effects since social spillovers can be used expedite adoption. We provide a methodology for...

We explore two split incentive issues between owners and occupants of residential dwellings: heating or cooling incentives are suboptimal when the occupant does not pay for energy use, and insulation incentives are suboptimal when the occupant cannot perfectly observe the owner's insulation choice. We empirically quantify the effect of these two ma...

A multi-regional integrated energy systems model is developed to assess the economic impact of hydrogen fuel cell, hydrogen internal combustion, and battery electric technologies on the economy of New Zealand. Base case results suggest that a hydrogen fuel dominant vehicle fleet offers economic savings over a conventional fleet but requires the lar...

Policies to promote renewable energy have been gaining momentum throughout the world, often justified by environmental and energy security concerns. This paper delves into the economic motivation for renewable energy policies by articulating the classes of market failures relevant to renewable energy. We describe how these market failures may vary...

Most US consumers are charged a near-constant retail price for electricity, despite substantial hourly variation in the wholesale market price. This paper evaluates the .rst program to expose residential consumers to hourly real time pricing (RTP). I .nd that enrolled households are statistically signi.cantly price elastic and that consumers respon...

New Zealand has recently followed the path of several other countries in promoting solar hot water (SHW) systems in the effort to reduce greenhouse gas emissions, yet the economic efficiency of large-scale policies to encourage SHW remains a pressing question for policymakers. This paper develops an economic framework to examine policies to promote...

Small economies such as New Zealand risk significant economic hardship without careful evaluation of alternatives to petroleum-based transportation due to the adverse effects of climate change and depleting international oil reserves. This paper uses an integrated multi-regional multi-fleet system dynamics model of New Zealand's energy economy to a...

The approach used to model technological change in a climate policy model is a critical determinant of its results in terms of the time path of CO2 prices and costs required to achieve various emission reduction goals. We provide an overview of the different approaches used in the literature, with an emphasis on recent developments regarding endoge...

In the coming century, modern bioenergy crops have the potential to play a crucial role in the global energy mix, especially under policies to reduce carbon dioxide emissions as proposed by many in the international community. Previous studies have not fully addressed many of the dynamic interactions and effects of a policy-induced expansion of bio...

Much policy attention has been given to promote fledgling energy technologies that promise to reduce our reliance on fossil fuels. These policies often aim to correct market failures, such as environmental externalities and learning¥by-doing (LBD). We examine the implications of the assumption that LBD exists, quantifying the market failure due to...

We review literature on several types of energy efficiency policies: appliance standards, financial incentive programs, information and voluntary programs, and management of government energy use. For each, we provide a brief synopsis of the relevant programs, along with available existing estimates of energy savings, costs, and cost-effectiveness...

An integrated system dynamics model of New Zealand's energy and economic systems is used to examine the impact of carbon taxes ranging from $25/tonne of CO2 to $150/tonne of CO2 on vehicle fleet composition to 2050. Key technology drivers of cost improvement, consumer preference, availability of LNG and oil prices are identified. The vehicle techno...

Data sets from the US Environmental Protection Agency's 1995 and 2000 Community Water Systems surveys were used to examine the production costs of water supply systems. The authors estimate water supply economies of scale by estimating the elasticities of both the total unit cost and the individual component costs. For total unit cost, they found t...

Marginal cost pricing has been long advocated as an efficient way of distributing scarce road resources. In practice, however, policy makers have to retreat to second-best pricing schemes that are associated with lower transaction costs and are simpler for potential users to understand than the first-best marginal cost tolls. To date, the majority...

Marginal cost pricing has been long advocated as an efficient way of distributing scarce road resources. In practice, however, policy makers have to retreat to second-best pricing schemes that are associated with lower transaction costs and are simpler for potential users to understand than the first-best marginal cost tolls. To date, the majority...

Marginal cost pricing has been long advocated as an efficient way of distributing scarce road resources. In practice, however, policy makers have to retreat to second-best pricing schemes that are associated with lower transaction costs and are simpler for potential users to understand than the first-best marginal cost tolls. To date, the majority...

We study the effects of carbon taxation and revenue recycling across the income distribution in Ireland. Price changes of fuels and all other final goods and services are taken into account. If applied only to the emissions not covered by the EU Emissions Trading Scheme, a carbon tax of €20/tCO2 would cost the poorest households around €3.5/week an...

Energy efficiency policies are a primary avenue for reducing carbon emissions, with potential additional benefits from improved air quality and energy security. We review literature on a broad range of existing non-transportation energy efficiency policies covering appliance standards, financial incentives, information and voluntary programs, and g...

In this study we use datasets from the 1995 and 2000 Community Water Supply surveys to examine the production costs of water supply systems. We first estimate the economies of scale in water supply by estimating the total unit cost as well as individual component cost elasticities. For total unit cost elasticity, we find that a 1% increase in produ...

In determining the marginal cost of congestion, economists have traditionally relied upon directly measuring traffic congestion on network links, disregarding any “network effects,” since the latter are difficult to estimate. While for simple networks the comparison of the network-based congestion costs with the link-based ones can be done within a...

Economists have long advocated congestion pricing as an efficient way of allocating scarce roadway capacity. However, with a few exceptions, congestion tolls are rarely used in practice and strongly opposed by the public and elected officials. Although high implementation costs and privacy issues are alleviated as appropriate technologies are devel...

Using a unique panel data set of national level car ownership, use, fuel economy and fuel use, we analyze the apparent stabilization of fuel use and CO2 emissions from cars that set in from the early 2000s. We model the car stock, fuel intensity, and vehicle usage for 9 OECD countries using data from 1973-2007, examining how the relationships betwe...

To combat climate change, many economists and policymakers advocate price-based approaches, such as greenhouse gas emissions taxes and emissions trading programs, or technology-based approaches, such as R&D subsidies and public-private R&D partnerships. In the end, however, both types of approaches rely on consumers and firms to make different choi...

Restricted Item. Print thesis available in the University of Auckland Library or available through Inter-Library Loan. New Zealand has already begun promoting solar energy as a promising technology to address global climate change, but the economic efficiency of large-scale policies to promote solar energy remains a pressing question for policymake...