What we're reading: Energy Job Market Papers We're Excited About
Where new researchers are looking
The Abundance and Growth Fund team combed through over 1,000 economics job market papers to find the ones relevant to our work on abundance and growth. We’re in the process of posting roundups by topic; first we did innovation, then housing, and now we’re doing energy.
We use job market papers to track where the next generation of researchers is pushing the frontier on energy economics - particularly when they’re addressing timely, real-world questions like the role of energy in productivity, how firms respond to environmental regulations, and how local incentives affect generation buildout.
We found 19 papers covering everything from transmission to distributed solar to the local externalities of wind generation (twice!). We’ve posted the full list of those papers here. Below are five papers (titles and abstract) that I’m especially excited to dig into.
The Role of Energy Efficiency in Productivity: Evidence from Canada
Anil Gogebakan
This paper quantifies how misallocation of energy, alongside capital and labor, across provinces and sectors reduces productivity. Using Canadian provincial input–output data (2014–2020) within a Hsieh–Klenow framework, I decompose productivity losses into interprovincial (within-sector) and intersectoral (within-province) components and estimate each input’s contribution separately. Unlike most studies focused on the manufacturing sector, this is the first comprehensive analysis of energy misallocation covering the entire economy. Results suggest misallocation lowers aggregate productivity by 5–8%, with most of the gap driven by within-sector distortions. Energy, though only around 8% of input costs, accounts for up to 1.5% of the gap—comparable to capital and exceeding labor—highlighting its outsized role. The findings identify interprovincial barriers and energy market distortions as key areas for narrowing productivity gaps and guiding climate policy. Reallocating energy could significantly improve productivity while reducing emissions, delivering a ‘double dividend.’
Transmission Congestion is Knocking the Wind Out of Renewable Investments
Abigail Boatwright
Transmission congestion represents a critical bottleneck for the efficient deployment of renewable energy necessary to meet rising electricity demand and decarbonization targets. This paper provides the first causal quantification of how constraints within an electricity market region alter the scale and spatial allocation of energy investments. Crucially, congestion modifies incentives, creating downside risk that deters renewables while generating profitable rents that sustain otherwise uneconomic fossil fuel projects. I estimate a developer entry and location choice model to distinguish how congestion drives both early site screening and later project attrition. Empirical results using data from Texas confirm that high congestion losses strongly discourage applications and push renewables from optimal resource-rich sites. Counterfactual simulations illustrate substantial welfare gains: relieving the ten most constrained lines boosts planned renewable output by 1.6 million MWh and corrects spatial misallocation, with 8% of the increase coming from projects moving to more productive sites. Simultaneously, the targeted congestion relief deters over 1,500 MW of planned fossil fuel investment, avoiding an estimated $608 million annually in CO2 damages. These findings demonstrate that current U.S. regulatory practice, which omits the value of generation investment effects in transmission cost-benefit analysis, significantly undervalues strategic transmission planning, risking suboptimal infrastructure deployment.
Building with Externalities: Local Governments and Wind Farms
Zane Kashner
Does local government regulation of new infrastructure with local externalities result in efficiency? Although local governments’ choices can internalize local costs, political or contracting frictions may cause actual outcomes to deviate from the idealized benchmark of Coase (1960). I study this problem in the context of wind farms. I develop a model of interaction between wind developers and local governments where wind farms are built only if they are both profitable and allowed by local governments, who weigh local costs against payments from developers. I estimate that the average household’s cost of living three miles from a wind farm is around 7.5% of its home’s value. I find that built wind farms trade off more than $7 of engineering profit for each $1 of cost to households. This arises in part because local governments must be paid roughly $3 for every $1 of externality to approve projects. Moreover, I find that state regulations limiting payments to local governments further depress wind-farm construction. I compare the performance of alternative developer-government contracting rules in reaching the United States’ net-zero carbon goals. I find that requiring wind developers to pay local governments 20% of nearby homes’ value raises social welfare by about $220 billion relative to when developers cannot pay local governments.
WIMBY: Wind In My Back Yard
Jacob Ebersole
Wind energy projects generate global environmental benefits that greatly exceed local property value losses. Yet county governments often reject proposed projects. To assess the electoral incentives of permit-issuing county officials, I link spatial variation in local costs and benefits to precinct-level election results in Illinois. Using a difference-in-differences design, I find that incumbent county officials lose vote share in precincts that incur property value losses following project approvals, but gain votes in precincts that benefit from higher school district property tax revenues.
The Role of Incumbent Firms and Regulation in America’s Natural Gas Energy Transition
Michael R. Karas
This paper examines how incumbent firms’ adoption of new energy technologies is shaped by the regulatory environment, focusing on the transition from manufactured to natural gas in the United States during the first half of the twentieth century. Using detailed, newly digitized panel data on municipality-level gas utility services, I exploit variation in pipeline proximity for municipalities along the pipeline’s path and regulatory changes introduced by the Natural Gas Act of 1938 to investigate incumbent utility firms’ decisions to switch from manufactured to natural gas. I find that incumbent firms delayed adopting natural gas during the initial unregulated period but accelerated adoption after the implementation of federal regulation. When considering the factors that predict early adoption by incumbents, ownership by a holding company is associated with switching before federal regulation, while higher switching costs are associated with switching after regulation. These results are consistent with federal regulation helping reduce the gap between regulated retail prices charged by gas utilities and previously unregulated wholesale pipeline prices, allowing incumbents to recoup switching costs, illustrating that coordination through regulation or holding company ownership can reduce uncertainty and expedite technological transitions.
The Impact of Solar Panel Installation on Electricity Consumption and Production: A Firm’s Perspective
Natalia D’Agosti
Since 2010, the Uruguayan government has fostered the installation of solar panels among firms to promote the production of small-scale renewable electricity. Under this policy, firms that have installed solar panels are allowed to feed any surplus electricity into the grid. Using firm-level electricity consumption and grid injection for all the firms that installed a microgenerator from April 2011 to September 2022, we study the economic and environmental consequences of this policy. First, we find that installing a solar panel reduces the amount of electricity extracted from the grid. Second, we find that it increases the electricity injected into the grid. Third, we find that it reduces CO2 emissions only marginally. Fourth, we provide evidence of a rebound effect, which ranges from 20% to 26%. Lastly, we propose an alternative policy that allows firms to store their excess electricity in batteries rather than immediately injecting it into the grid. This policy would further reduce CO2 emissions by 2.7%, incentivizing the injection of electricity at night, when fossil-fuel-based facilities meet the demand at the margin. This result highlights the importance of integrating storage solutions into renewable energy policy design.