Energy Economics and Policy

Readings

• Pindyck, R., and D. Rubinfeld. Microeconomics . 6th ed. Upper Saddle River, NJ: Prentice Hall, 2005. ISBN: 0130084611.
  Recommended
• * United States Energy Information Agency (EIA). Annual Energy Review 2005 . Washington, DC, 2006, chapter 1. ↗
  Listed reading
• * ———. International Energy Outlook 2006 . Washington, DC, 2006, chapter 1. ↗
  Listed reading
• * United States Environmental Protection Agency (EPA). Trends in Air Emissions , 2005. ↗
  Listed reading
• * Smil, V. “Energy in the Twentieth Century: Resources, Conversions, Costs, Uses and Consequences.” Annual Review of Energy and the Environment 25 (2000): 21-51.
  Listed reading
• ** Fouquest, R., and P. Pearson. “A Thousand Years of Energy Use in the United Kingdom.” The Energy Journal 19, no. 4 (1998): 1-41.
  Listed reading
• *** ———. “Seven Centuries of Energy Services: The Price and Use of Light in the United Kingdom (1300-2000).” The Energy Journal 27, no. 1 (2006): 139-177.
  Listed reading
• * Pindyck and Rubinfeld. 2005, chapter 2.
  Listed reading
• * Hausman, J. “Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables.” The Bell Journal of Economics 10, no. 1 (1979): 33-54.
  Listed reading
• * Baughman, M., and P. Joskow. “The Effects of Fuel Prices on Residential Appliance Choice in the United States.” Land Economics 51, no. 1 (1975): 41-49.
  Listed reading
• * Hughes, J., C. Knittel, and D. Sperling. “Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand.” Center for the Study of Energy Markets, Working Paper 159 (2006). ( PDF ) ↗
  Listed reading
• ** Kamerschen D., and D. Porter. “The Demand for Residential, Industrial and Total Electricity, 1973-1998.” Energy Economics 26 (2004): 87-100.
  Listed reading
• *** Slade, M., C. Kolstad, and R. Weiner. “Buying Energy and Nonfuel Minerals.” Chapter 20 in Handbook of Natural Resource and Energy Economics. Vol. 3. Edited by A. Kneese and J. Sweeney. San Diego, CA: Elsevier Science Publishers, 1993. ISBN: 0444878009.
  Listed reading
• * Sykes, A. “An Introduction to Regression Analysis.” Chicago Working Paper in Law and Economics No. 20 (October 1993). ( PDF ) ↗
  Listed reading
• * Pindyck and Rubinfeld. 2005, section 15.8.
  Listed reading
• * Krautkraemer J., and M. Toman. “Fundamental Economics of Depletable Energy Supply.” Resources for the Future, Discussion Paper 03-01 (2003).
  Listed reading
• * Flynn, E. “ Impact of Technological Change and Productivity on the Coal Market .” Energy Information Administration, Issues in Midterm Analysis and Forecasting 2000 (2000). ↗
  Listed reading
• ** Heal, G. “The Optimal Use of Exhaustible Resources.” Chapter 18 in Handbook of Natural Resource and Energy Economics. Vol. 3. Edited by A. Kneese and J. Sweeney. San Diego, CA: Elsevier Science Publishers, 1993. ISBN: 0444878009.
  Listed reading
• * Deffeyes, K. Hubbert’s Peak: The Impending World of Oil Shortage . Princeton, NJ: Princeton University Press, 2001, chapter 1. ISBN: 0691116253. ( PDF - 7.9 MB ) ↗
  Listed reading
• * Lynch M. “The Pessimism About Petroleum Resources: Debunking the Hubbert Model (and Hubbert Modelers).” Minerals and Energy - Raw Materials Report 18, no. 1 (2003): 1-18.
  Listed reading
• * Watkins, G. “Oil Scarcity: What Have the Past Three Decades Revealed?” Energy Policy 34 (2006): 508-514.
  Listed reading
• * Smith, J. “Inscrutable OPEC? Behavioral Tests of the Cartel Hypothesis.” The Energy Journal 25, no. 1 (2005): 51-82.
  Listed reading
• * Barsky, R., and L. Killian. “Oil and the Macroeconomy Since the 1970s.” Journal of Economic Perspectives 18, no. 4 (2004): 115-134.
  Listed reading
• * Killian, L. “Exogenous Oil Supply Shocks: How Big Are They and How Much Do They Matter for the U.S. Economy?” Center for Economic Policy Research, Discussion Paper 5131 (July 2005).
  Listed reading
• * Council on Foreign Relations. “ National Security Consequences of US Oil Dependency .” Independent Task Force Report No. 58 (2006). ↗
  Listed reading
• ** Kaufman, R., S. Dees, P. Karadeloglou, and M. Sanchez. “Does OPEC Matter: An Econometric Analysis of Oil Prices.” The Energy Journal 25, no. 4 (2004): 67-90.
  Listed reading
• ** Pindyck, R. “Gains to Producers from Cartelization of an Exhaustible Resource.” Review of Economics and Statistics 60, no. 2 (1978): 238-251.
  Listed reading
• *** Considine, T. “Is the Strategic Petroleum Reserve Our Ace in the Hole?” The Energy Journal 27, no. 3 (2006): 91-112.
  Listed reading
• * Leitzinger, J., and M. Collette. “A Retrospective Look at Wholesale Gas: Industry Restructuring.” Journal of Regulatory Economics 21, no. 1 (2002): 79-101.
  Listed reading
• * National Petroleum Council. “Balancing Natural Gas Policy: Fueling the Demands of a Growing Economy.” Volume I: Summary of Findings and Recommendations (September 2003). ( PDF - 3.9 MB ) ↗
  Listed reading
• * Mazighi, A. “An Examination of the International Gas Trade.” OPEC Review 27, no. 4 (December 2003): 313.
  Listed reading
• ** MacAvoy, P., and R. Pindyck. “Alternative Regulatory Policies for Dealing with the Natural Gas Shortage.” The Bell Journal of Economics and Management Science 4, no. 2 (1973): 454-498.
  Listed reading
• ** Cuddington, J., and Z. Wang. “Assessing the Degree of Spot Market Integration for U.S. Natural Gas: Evidence from Daily Price Data.” Journal of Regulatory Economics 29 (2006): 195-210.
  Listed reading
• * Joskow, P. “Deregulation and Regulatory Reform in the U.S. Electric Power Sector.” Chapter 4 in Deregulation of Network Industries: What’s Next? Edited by S. Peltzman and C. Whinston. Washington, D.C.: American Enterprise Institute Press, 2000, pp. 113-188.
  Listed reading
• * Borenstein, S. “The Trouble with Electricity Markets: Understanding California’s Restructuring Disaster.” Journal of Economic Perspectives 16, no. 1 (2002): 191-211.
  Listed reading
• * Joskow, P., and E. Kahn. “Quantitative Analysis of Pricing Behavior in California’s Electricity Market During the Summer 2000.” The Energy Journal 23, no. 4 (2002): 1-35.
  Listed reading
• * Joskow, P. “Incentive Regulation in Theory and Practice: Electricity Distribution and Transmission Networks.” Working Paper (2006). ( PDF ) ↗
  Listed reading
• * ———. “Markets for Power in the United States: An Interim Assessment.” The Energy Journal 27, no. 1 (January 2006).
  Listed reading
• ** Wolfram, C. “Measuring Duopoly Power in the British Electricity Market.” American Economic Review 89, no. 4 (1999): 805-826.
  Listed reading
• ** Borenstein, S. “The Long Run Efficiency of Real-Time Electricity Pricing.” The Energy Journal 26, no. 3 (2005): 93-116.
  Listed reading
• *** Borenstein, S., J. Bushnell, and F. Wolak. “Measuring Market Inefficiencies in California’s Restructured Wholesale Electricity Market.” The American Economic Review 92, no. 5 (2002): 1376-1405.
  Listed reading
• *** Park, H., J. Mjelde, and D. Bessler. “Price Dynamics Among U.S. Electricity Spot Markets.” Energy Economics 28 (2006): 81-101.
  Listed reading
• * Energy Information Administration. “ Derivatives in Risk Management for Petroleum, Gas and Electricity ” (October 2002). ↗
  Listed reading
• * Mazighi, A. “The Efficiency of Natural Gas Futures Markets.” OPEC Review (2003).
  Listed reading
• ** Herce, M., J. Parsons, and R. Ready. “Using Futures Prices to Filter Short-Term Volatility and Recover a Latent, Long-Term Price Series for Oil.” MIT Center for Energy and Environmental Policy Research Working Paper 06-005 (April 2006). ( PDF ) ↗
  Listed reading
• ** Chinn, M., M. LeBlanc, and O. Coibion. “ The Predictive Content of Energy Futures: An Update on Petroleum, Natural Gas, Heating Oil and Gasoline .” National Bureau of Economic Research Working Paper 11033 (January 2005). ↗
  Listed reading
• * Intergovernmental Panel on Climate Change (IPCC). “Climate Change 2007: The Physical Science Basis: Summary for Policymakers” (February 2007). ( PDF - 3.7 MB ) ↗
  Listed reading
• *" Stern Review of the Economics of Climate Change .” Pre-publication edition. London, UK: HM Treasury, October 2007 [anticipated final publication]. ↗
  Listed reading
• * Nordhaus, W. D. “The ‘Stern Review’ on the Economics of Climate Change.” Mimeo (November 17, 2006).
  Listed reading
• * Sokolov, A. P., C. A. Schlosser, S. Dutkiewicz, S. Paltsev, D. W. Kicklighter, H. D. Jacoby, R. G. Prinn, C. E. Forest, J. Reilly, C. Wang, B. Felzer, M. C. Sarofim, J. Scott, P. H. Stone, J. M. Melillo, and J. Cohen. “The MIT Integrated Global System Model (IGSM) Version 2: Model Description and Baseline Evaluation.” MIT Joint Program on the Science and Policy of Global Change, Report No. 124 (July 2005). ( PDF - 1.5 MB ) ↗
  Listed reading
• * Paltsev, S., J. M. Reilly, H. D. Jacoby, R. S. Eckaus, J. McFarland, M. Sarofim, M. Asadoorian, and M. Babiker. “The MIT Emissions Prediction and Policy Analysis (EPPA) Model: Version 4.” MIT Joint Program on the Science and Policy of Global Change, Report No. 125 (August 2005). ( PDF - 1.8 MB ) ↗
  Listed reading
• ** Mendelsohn, R., W. Nordhaus, and D. Shaw. “The Impact of Climate Change on U.S. Agriculture: A Ricardian Approach.” The American Economic Review 84, no. 4 (1994): 753-771.
  Listed reading
• ** Cline, W. “The Impact of Global Warming on Agriculture: Comment.” The American Economic Review 86, no. 5 (1996): 1309-1311.
  Listed reading
• * Pindyck and Rubinfeld. 2005, Chapter 18.
  Listed reading
• * Ellerman, A., P. Joskow, and D. Harrison. “ Emissions Trading in the U.S.: Experience, Lessons and Considerations for Greenhouse Gases .” Report for the Pew Centre on Global Climate Change (May 2003). ↗
  Listed reading
• * Pizer, M. “The Evolution of a Global Climate Change Agreement.” American Economics Association Papers and Proceedings 96, no. 2 (2006): 26-30.
  Listed reading
• * Nordhaus, W. “After Kyoto: Alternative Mechanisms to Control Global Warming.” American Economics Association Papers and Proceedings 96, no. 2 (2006): 31-34.
  Listed reading
• * Olmstead, S., and R. Stavins. “An International Policy Architecture for the Post-Kyoto Era.” American Economics Association Papers and Proceedings 96, no. 2 (2006): 35-38.
  Listed reading
• * Thomson, V. “Early Oobservations on the European Union’s Greenhouse Gas Emissions Trading Scheme: Insights for United States Policymakers.” Report in collaboration with Pew Centre on Global Climate Change (April 2006). ( PDF ) ↗
  Listed reading
• ** Joskow, P., R. Schmalensee, and E. Bailey. “The Market for Sulfur Dioxide Emissions.” The American Economic Review 88, no. 4 (1998): 669-685.
  Listed reading
• * Freme, F. “ U.S. Coal Supply and Demand: 2005 Review .” Energy Information Administration (April 2006). ↗
  Listed reading
• * Massachusetts Institute of Technology. “ The Future of Coal: An Interdisciplinary MIT Study .” March 2007. ↗
  Listed reading
• * Massachusetts Institute of Technology. “ The Future of Nuclear Power: An Interdisciplinary MIT Study .” 2003. ↗
  Listed reading
• * Deutch J., and E. Moniz. “Making the World Safe for Nuclear Energy.” Survival 46, no. 4 (2004): 65-79.
  Listed reading
• * Hassett, K. and G. Metcalf. “Energy Conservation Investment: Do Consumers Discount the Future Correctly?” Energy Policy (June 1993): 710-716.
  Listed reading
• * Hausman, J., and P. Joskow. “Evaluating the Costs and Benefits of Appliance Efficiency Standards.” The American Economic Review 72, no. 2 (1982): 220-225.
  Listed reading
• * Nadel, S. “Appliance and Equipment Efficiency Standards.” Annual Review of Energy and the Environment 27 (2002): 159-192.
  Listed reading
• * Joskow, P., and D. Marron. “What Does a Negawatt Really Cost? Evidence from Utility Conservation Programs.” The Energy Journal 13, no. 4 (1992): 41-67.
  Listed reading
• * Portney, P., and I. Parry. “Policy Watch: The Economics of Fuel Economy Standards.” Journal of Economic Perspectives 17, no. 4 (2003): 203-217.
  Listed reading
• ** Metcalf, G. “Energy Conservation in the United States: Understanding its Role in Climate Policy.” MIT Joint Program on the Science and Policy of Global Change, Report No. 138 (2006). ( PDF ) ↗
  Listed reading
• *** Newell, R., A. Jaffe, and R. Stavins. “The Induced Innovation Hypothesis and Energy-Saving Technological Change.” The Quarterly Journal of Economics 114, no. 3 (1999): 941-975.
  Listed reading
• * McGowan, J., and S. Conners. “Windpower: A Turn of the Century Review.” Annual Review of Energy and the Environment 25 (2000): 147-197.
  Listed reading
• * Palmer, K., and D. Bullaw. “Cost-Effectiveness of Renewable Electricity Policies.” Energy Economics 27 (2005): 873-894.
  Listed reading
• * McDonlad, S., S. Robinson, and K. Thierfelder. “Impact of Switching Production to Bioenergy Crops: The Switchgrass Example.” Energy Economics 28 (2006): 243-265.
  Listed reading
• There is no textbook for this course. However, we will be assigning a few sections from Pindyck, R., and D. Rubinfeld (2005) primarily for review purposes:
  Listed reading
• Pindyck, R., and D. Rubinfeld. Microeconomics . 6th ed. Upper Saddle River, NJ: Prentice Hall, 2005. ISBN: 0130084611.
  Listed reading
• Many of you used this book in 14.01. If you used a previous edition you will find equivalent sections there. If you used a different intermediate microeconomics textbook you should find equivalent sections in it. If in doubt ask the TA. If you did not retain your intermediate economics textbook, we suggest that you buy a used copy for reference purposes. It will be useful.
  Listed reading