JAMES BUSHNELL
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August 2024
Picture

​Professor

Department of Economics

Co-Director

Davis Energy Economics Program (DEEP)

Modeling Uncertainty in Climate Policy: An Application to the US IRA
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​In recent years the analysis of US climate policy on the electricity sector has predominantly deployed electricity planning or capacity expansion models that use deterministic or equilibrium optimization methods. While uncertainty in key input assumptions is considered, it is usually restricted to scenario analysis. In this study we combine time-series econometric forecasting methods with an equilibrium electricity system-expansion model. The goal is to produce statistically rigorous distributions of outcomes, rather than rely upon individually selected scenarios. We apply these techniques to the case of the US Inflation Reduction Act (IRA) in the context of the western US electricity grid.

 The Electric Ceiling: Limits and Costs of Full Electrification



Electrification is a centerpiece of global decarbonization efforts. Yet there are reasons to be skeptical of the inevitability, or at least the optimal pace, of the transition. We discuss several under-appreciated costs of full, or even deep, electrification. Consumer preferences can operate in favor of and in opposition to electrification goals; and electrification is likely to encounter physical and economic obstacles when it reaches some as-yet-unknown level. While we readily acknowledge the external benefits of decarbonization, we also explore sev- eral under-appreciated external costs. The credibility and eventual success of decarbonization efforts is enhanced by foreseeing and ideally avoiding predictable but non-obvious costs of promising abatement pathways. Thus, even with all of its promise, the degree of electrification may ultimately reach a limit.
  • Home
  • About & CV
  • Research
    • Working Papers
    • Journal Publications
    • Book Chapters
  • Policy Engagement
    • Reports and Testimony
    • Blog