Juan Dodyk (Applied Stats)

Today's Speaker

Juan Dodyk (Harvard), "Inefficient Policies in the Green Transition"

Abstract

Countries have employed a wide range of policy instruments to mitigate climate change. These policies share a common pattern: governments initially rely on subsidies, together with command-and-control regulations, and eventually adopt carbon pricing. I develop a dynamic model of climate policymaking that accounts for this pattern. Although the first-best policy is solely a carbon tax, a climate-concerned policymaker uses subsidies to induce investments in emissions-abatement technologies with the goal of building a coalition in support of efficient policies in the future. The model provides additional insights: First, a policy package that satisfies political constraints and passes a cost-benefit analysis only exists if the economic costs of decarbonization are not too large, and the social cost of carbon is intermediate. Second, soft commitments, such as net-zero targets, can have real consequences by shifting expectations, but only if initial political pressure is not too large and policymakers are sufficiently concerned about climate. Finally, a higher risk of electoral turnover that replaces a green proposer with a misaligned brown proposer can improve prospects for a green transition.

The Applied Statistics Workshop (Gov 3009) meets all academic year, Wednesdays, 12pm-1:30pm, in CGIS K354. This workshop is a forum for advanced graduate students, faculty, and visiting scholars to present and discuss methodological or empirical work in progress in an interdisciplinary setting. The workshop features a tour of Harvard's statistical innovations and applications with weekly stops in different fields and disciplines and includes occasional presentations by invited speakers.

All interested Harvard affiliates are invited to attend.