Spring 2015 - 61362 - PA393L - Advanced Policy Economics

Innovation & Diffusion of Energy Technologies

How does technological change—the process of invention, innovation, and diffusion—in the energy industry enable societies to meet their energy needs? What is the role of policy in guiding technological change in certain directions that societies deem to be important (security; efficiency; environment-friendly)? Are market-based policies (taxes; price signals; subsidies/incentives, etc.) more efficient and effective than command-and-control policies (technology/emissions standards, etc.)? Are certain types of policies more effective in spurring innovation in energy technologies while other types of policies are more effective for technology diffusion? How does consumer behavior mediate the effects of technological change and policies?

This course will examine the linkages between technological change, energy, and the environment described above, with a focus on how innovation and diffusion happen in the context of energy technologies, and on the role of policy.

The course will be organized around a collection of journal/review articles drawn from the technological change and energy literatures. The collection of articles will cover three subthemes: conceptual/analytical frameworks (innovation and diffusion; learning by doing; policy inducement; general purpose technologies; role of market structure; behavioral and institutional aspects; investment under uncertainty; and technological lock-in), methodologies (econometrics; microeconomic modeling; and case studies), and energy technologies (solar PV; coal and carbon capture and storage; wind; LNG; nuclear power; oil and natural gas; energy efficiency; SO2 scrubbers; electric vehicles). The emphasis will not be on the methodologies per se, but rather on the insights they provide in the context of their applications to the analytical frameworks and technologies.

Each weekly session will have assigned reading (about 4-5 research papers; ~150 pages). Evaluation will be based upon participation in class discussions; one presentation to be made during the semester; two 3-page memos; and a 15-20 page final paper that applies the concepts and insights discussed in the course to a topic of individual choice.

Although not required, basic familiarity with energy technologies and concepts as well as basic understanding of microeconomics and econometrics will be useful.

Pre-requisites: Introductory Microeconomics, or Instructor’s consent.

This class is cross-listed with EER. LBJ is home department.