Climate Change, Directed Innovation, and Energy Transition: The Long-run Consequences of the Shale Gas Revolution

Join the Department of Economics for the following ECON Department Seminar, co-organised by the Inequality Platform and Joint Macro Seminar series with KU.

Fredag, 6 maj, 2022 - 13:15 to 14:15

Join us in PH16A - 2.80

What is the seminar about?

We investigate the short- and long-term effects of a shale gas boom in an economy where energy can be produced with coal, natural gas, or clean energy sources. In the short run, the shale gas boom has counteracting effects on CO2 emissions: it reduces the emission intensity of energy by substituting away from coal, but it also increases energy demand. We empirically document another potentially important effect, namely that the shale boom was associated with a decline in innovation in green relative to fossil fuels-based electricity generation technologies. Introducing directed technical change dynamics in our model, we derive conditions under which a shale gas boom reduces emissions in the short-run but increases emissions in the long-run by inducing firms to direct innovation away from clean towards fossil fuels innovation. We calibrate our model to the U.S. economy and find that the shale gas boom leads to an increase in emissions in the medium-run. Finally, we show that optimal climate policy should adjust to the shale boom by increasing green energy research subsidies.

Authors

Daron Acemoglu (MIT), Philippe Aghion (Collège de France, LSE), Lint Barrage (Brown) and David Hémous (University of Zurich).

Bio in brief

David Hémous is an Associate Professor of Economics at the University of Zurich and an Affiliated Professor at the UBS Center. He holds a PhD degree from Harvard University and was previously an Assistant Professor at INSEAD. His research interests focus on Economic Growth, Innovation, International Trade and Environmental Economics. In particular, he has worked on the role of innovation for climate change policies, the impact of automation on income distribution and the link between innovation and top income inequality.

Want to know more?

Please contact Battista Severgnini (bs.eco@cbs.dk), or join us on Friday 6 May @ 13.15 in PH16A - 2.80

Sidst opdateret: Business in Society platforms // 17/05/2022