Lawrence Goulder is Professor of Environmental and Natural Resources Economics at Stanford University and Director of the Center for Environmental and Energy Policy Analysis. He also chairs the Scientific Committee of the Climate Economics Chair.
What elements of the Annual Conference were particularly striking to you?
I liked the fact that the Annual Conference provided considerable variety in the backgrounds of its speakers — involving participation by the Chair’s own (usually younger) researchers, by members of the Chair’s Scientific Committee, and by important leaders in business and government. It was quite a coup for the Chair to assemble, in the late-afternoon session, the mayor of Paris, the head of the University of Paris-Dauphine, several very distinguished leaders of energy- and environment-related private firms, and key actors in NGOs — all at the same table! To me, that session marked an important step in establishing good communication among major decision makers.
The Chair has launched an initiative focusing on innovation and climate change policy. What perspectives do you have on it?
Economists have tended to focus on “emissions pricing” as key instruments for climate-change policy. They often recommend a carbon tax or a cap-and-trade system as the specific forms of emissions pricing. I am a huge fan of emissions pricing: it can help achieve reductions in greenhouse gases at lower cost than other, often conventional, forms of regulation. However, it is very important to consider as well “innovation policy,” which might take the form of subsidies to research and development in low-carbon technologies. Economic theory indicates that the combination of emissions pricing and innovation policy can achieve emission reductions at lower cost than either policy alone. While there has been much empirical work on emissions pricing, there is a strong need for empirical research on innovation policy – research to identify the innovation policies that will be most successful. I am very pleased to see that the Chair is aiming to fill the important empirical gaps through its new program on innovation and climate-change policy.