Research
Working Papers
The Aggregate Impact of Policy Uncertainty in the Green Energy Transition
Job Market Paper
Federal subsidies for wind and solar are the central instrument of U.S. electricity sector decarbonization, yet their presence has been historically uncertain. I study the macroeconomic and environmental costs of renewable policy uncertainty in a dynamic spatial general-equilibrium model with a stochastic subsidy and irreversible capital. I compute the transition with and without subsidy uncertainty, calibrating the uncertainty to the U.S. record of single-party control. I find that relative to a budget-neutral but uncertain subsidy, a permanent subsidy adds 13% more renewable capacity, which displaces gas, reducing cumulative power-sector emissions by 3.2% (2.29 Gt). At the same budget, making the subsidy credible generates an aggregate welfare gain with a present value of $322 billion. The uncertainty cost depends on the policy reversal being unforeseen; a repeal with a known date causes renewable capacity to be installed inefficiently early. Uncertainty has the greatest effect in the regions that are least suitable to wind and solar generation, like the Midwest, where renewable adoption depends on subsidies.
Spatial Effects of Diesel Tax: Trade and Externalities
Submitted
Freight transported by heavy-duty trucks generates carbon, local pollution, congestion, accident, and pavement damages along their routes. I develop a multi-commodity open-economy trade model that follows each trade flow through the U.S. highway network, allocating emissions, damages, and tax revenue to every state and county it crosses. Using Freight Analysis Framework shipment data and web-scraped diesel prices, I estimate freight responses to fuel costs. Increasing the federal diesel tax to its 1993 real value avoids more than $700 million in damages over 2018–2024, with pavement damage generating the largest benefit. Most benefits occur in corridor states that freight passes through, and part of the welfare cost is borne by foreign buyers of U.S. exports. A unilateral state diesel tax creates large spillovers: when New Mexico raises its tax to California’s level, freight shifts to alternative corridors, increasing externalities in neighboring states.
Permits as Real Options: Evidence and Implications for Regulatory Leakage
with Nicholas Vreugdenhil · Submitted
We identify a new channel for regulatory leakage: the “permitting channel.” In many settings, permits lock in the regulatory regime at approval, allowing firms to acquire the option to invest under current rules. Unlike the conventional Green Paradox response, this channel operates without accelerating physical investment and pollution. We develop a framework in which firms can use real options to avoid anticipated regulation. We estimate the framework using Colorado’s oil and gas reforms, where permits surged before regulation but drilling did not. Policy-relevant designs that remove the permitting channel substantially reduce the health risks from pollution despite amplifying anticipatory investment.
Work in Progress
The Forest Is Worth More Standing Than Cut
with Wyatt Brooks