Vision for Energy Transition

In our podcast series, “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program,” I’ve had the pleasure of engaging in conversations over the past three years with a number of truly outstanding economists who have carried out important work in the realm of environment, energy, and resource economics, and also served in important government positions, and my most recent podcast episode is no exception, because I’m joined by James Stock, the Harold Hitchings Burbank Professor of Political Economy at Harvard, where he is also Harvard’s inaugural Vice Provost for Climate and Sustainability, and the Director of the new Salata Institute for Climate and Sustainabilty.  Also, Jim served as a Member of President Obama’s Council of Economic Advisers, where he focused on macroeconomics and energy & environmental policy.

In the podcast, we discuss the arc of Jim’s economic research, including on energy and climate change, his government service, his thoughts on the current state of climate change policy, as well as new his new role directing the Salata Institute at Harvard.  You’ll find this and much more in the latest episode of “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program,” a podcast produced by the Harvard Environmental Economics Program.  I hope you will listen to our complete conversation here.

It is striking that when talking about recent developments in U.S. climate policy, particularly over the past year, Jim Stock is really quite positive.

“The nation has made huge progress over [the course of] 2022 with the passage of the Inflation Reduction Act,” he said. “This is a huge piece of legislation. It’s really going to set the stage for driving substantial emission reductions, especially in the power sector. So that’s fantastic, [and] we all have to applaud that passage.”

Jim also commends the U.S. Congress for its bipartisan infrastructure bill which includes – among many other things – some $5 billion over five years to help states create a network of electric vehicle charging stations.  But even with such significant pieces of legislation, Stock acknowledges that the most optimistic projection for emission reductions in 2040 relative to 2005 is only about 40 percent.

“So, it’s not even a glass half-full situation,” Stock remarks. “We’ve done this huge amount of work and we’ve passed this really important legislation, but we’re only at 40 percent reduction. There is so much more work that needs to be done, and I think a big part of that work is actually figuring out what the right agenda is.”

Part of the agenda, Stock says, is determining what actions need to be taken at all levels of government and business to achieve meaningful progress. But the potential for significant progress is possible, he argues, because of the tremendous technological advancements in recent years.   Interestingly, Jim Stock thus explains the reliance in the Inflation Reduction Act on “carrots” (subsidies), as opposed to “sticks,” not just on the basis of political feasibility, but also on the reality of technological change.

“If you think back to 2005 … there really weren’t good alternatives to coal and natural gas in the power sector, and electric vehicles were ridiculously expensive, and we just didn’t have the technology.  Today everything is totally different, where we are looking at technologies, whether they’re light duty vehicles or solar or wind, and now increasingly batteries, even grid storage batteries, are really becoming at a much better cost point and are actually beating out their fossil fuel alternatives. So now the question is, what can we do to spur that?  At this point, subsidies can be very effective.”

I also ask Jim about his recent appointment as director of the Salata Institute, and he responds by noting that it reflects Harvard’s commitment to pursue pragmatic solutions to the climate problem and communicate them to policymakers and the general public.

“The mission of the Institute is to harness the strengths and abilities and powers of Harvard University and its scholars and students to press forward viable solutions and practical solutions in an impactful way in the real world,” he says, emphasizing that the challenge reaches across multiple disciplines. “It spans economics. It spans the sciences. It spans health and spans business, and so you need to have expertise drawing from across the different parts of the university and different fields to really be able to make progress.”

For this and much, much more, I encourage you to listen to this 45th episode of the Environmental Insights series, with future episodes scheduled to drop each month.  You can find a transcript of our conversation at the website of the Harvard Environmental Economics Program.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunes, Pocket Casts, Spotify, and Stitcher.


Author: Robert Stavins

Robert N. Stavins is the A.J. Meyer Professor of Energy & Economic Development, John F. Kennedy School of Government, Harvard University, Director of the Harvard Environmental Economics Program, Director of Graduate Studies for the Doctoral Program in Public Policy and the Doctoral Program in Political Economy and Government, Co-Chair of the Harvard Business School-Kennedy School Joint Degree Programs, and Director of the Harvard Project on Climate Agreements.