Question A:
Government subsidies for investment in green technologies are justified by substantial benefits coming from reducing unpriced carbon emissions and generating positive R&D spillovers.
Responses
Responses weighted by each expert's confidence
Question B:
Using subsidies for green technologies instead of full carbon prices will lead to substantially more rent-seeking and hence substantially higher costs to achieve a given reduction in emissions.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
|
This is true even when there are carbon prices. The view that policy should set the right carbon price and the market can do the rest is invalid. R&D generates uninternalized spillovers, so there is a first-order need to redirect innovation even when there are carbon prices.
-see background information here -see background information here |
||||
 Joseph Altonji |
Yale | Bio/Vote History | ||
|
|
||||
 Alan Auerbach |
Berkeley | Bio/Vote History | ||
|
|
||||
 David Autor |
MIT | Bio/Vote History | ||
|
|
||||
 Abhijit Banerjee |
MIT | Bio/Vote History | ||
|
|
||||
 Marianne Bertrand |
Chicago | Bio/Vote History | ||
|
|
||||
 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
|
|
||||
 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
|
|
||||
 Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
|
|
||||
 David Cutler |
Harvard | Bio/Vote History | ||
|
|
||||
 Angus Deaton |
Princeton | Bio/Vote History | ||
|
|
||||
 Darrell Duffie |
Stanford | Bio/Vote History | ||
|
Compared to the direct application of carbon taxes or permit markets, subsidizing green tech (although perhaps better than nothing) probably has a big negative value. It will be costly to monitor for efficacy and waste. If there are good spillovers, where is the market failure?
|
||||
 Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
|
|
||||
 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
|
Better would be to correct the underpricing of carbon emissions. Not clear that subsidizing this sector's R&D is preferable to subsidizing R&D with spillovers more generally.
|
||||
 Liran Einav |
Stanford | Bio/Vote History | ||
|
|
||||
 Ray Fair |
Yale | Bio/Vote History | ||
|
|
||||
 Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
|
|
||||
 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
|
|
||||
 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
|
|
||||
 Robert Hall |
Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
 Oliver Hart |
Harvard | Bio/Vote History | ||
|
I would prefer carbon taxes but these seem politically challenging.
|
||||
 Bengt Holmström |
MIT | Bio/Vote History | ||
|
|
||||
 Caroline Hoxby |
Stanford | Bio/Vote History | ||
|
|
||||
 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
|
|
||||
 Kenneth Judd |
Stanford | Bio/Vote History | ||
|
Some subsidies may be justified but not large ones. "Green tech" should include any tech that reduces CO2 emissions, not just the popular ones.
|
||||
 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Pete Klenow |
Stanford | Bio/Vote History | ||
|
|
||||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
|
|
||||
 Eric Maskin |
Harvard | Bio/Vote History | ||
|
|
||||
 William Nordhaus |
Yale | Bio/Vote History | ||
|
This is theoretical. The calculations of the appropriate subsidy are difficult and almost never made.
|
||||
 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
|
|
||||
 Emmanuel Saez |
Berkeley | Did Not Answer | Bio/Vote History | |
|
|
||||
 Larry Samuelson |
Yale | Bio/Vote History | ||
|
Externalities and a lack of prices justify intervention, though other tools would be more effective than subsidies.
|
||||
 José Scheinkman |
Columbia University | Bio/Vote History | ||
|
|
||||
 Richard Schmalensee |
MIT | Bio/Vote History | ||
|
Only because carbon emissions are unpriced.
|
||||
 Carl Shapiro |
Berkeley | Bio/Vote History | ||
|
|
||||
 Robert Shimer |
University of Chicago | Bio/Vote History | ||
|
|
||||
 James Stock |
Harvard | Bio/Vote History | ||
|
In theory, yes if the benefit exceeds the cost. For the subsidies to wind, solar and EVs in the IRA, the cost per ton is well less than the EPA’s estimate of the Social Cost of Carbon. Other subsidies can be less cost effective, for example some energy efficiency subsidies.
-see background information here -see background information here |
||||
 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Christopher Udry |
Northwestern | Bio/Vote History | ||
|
Subsidies for technological innovation are part of the solution
|
||||
Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
|
Daron Acemoglu |
MIT | Bio/Vote History | ||
|
There is no evidence that subsidies to green innovation lead to more wastage than any other type of innovation subsidies or R&D tax credits (which are ubiquitous throughout the industrialized world).
|
||||
|
Joseph Altonji |
Yale | Bio/Vote History | ||
|
Full carbon pricing is a tough, tough sell. There is scope for subsidizing R&D and initial investments in green technology even with carbon pricing
|
||||
|
Alan Auerbach |
Berkeley | Bio/Vote History | ||
|
|
||||
|
David Autor |
MIT | Bio/Vote History | ||
|
The question presumes these are substitutes and I disagree. Even full carbon pricing is not sufficient to create the efficient level of directed technical change. We require both carbon pricing _and_ subsidies.
-see background information here |
||||
|
Abhijit Banerjee |
MIT | Bio/Vote History | ||
|
The right carbon tax may be an unrealistic counterfactual. Governments seem to find it politically challenging to implement them.
|
||||
|
Marianne Bertrand |
Chicago | Bio/Vote History | ||
|
|
||||
|
Markus Brunnermeier |
Princeton | Bio/Vote History | ||
|
|
||||
|
Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
|
|
||||
|
David Cutler |
Harvard | Bio/Vote History | ||
|
|
||||
|
Angus Deaton |
Princeton | Bio/Vote History | ||
|
|
||||
|
Darrell Duffie |
Stanford | Bio/Vote History | ||
|
|
||||
|
Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Barry Eichengreen |
Berkeley | Bio/Vote History | ||
|
Low confidence owing to the word "substantially".
|
||||
|
Liran Einav |
Stanford | Bio/Vote History | ||
|
|
||||
|
Ray Fair |
Yale | Bio/Vote History | ||
|
|
||||
|
Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Pinelopi Goldberg |
Yale | Bio/Vote History | ||
|
Full carbon prices are not politically feasible in many settings, incl. the United States. Green subsidies are politically viable.
|
||||
|
Michael Greenstone |
University of Chicago | Bio/Vote History | ||
|
|
||||
|
Robert Hall |
Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Oliver Hart |
Harvard | Bio/Vote History | ||
|
I'm not sure about the rent-seeking but the costs will be higher.
|
||||
|
Bengt Holmström |
MIT | Bio/Vote History | ||
|
We should use full range of instruments. Both subsidies for investment and of course carbon prices.
|
||||
|
Caroline Hoxby |
Stanford | Bio/Vote History | ||
|
|
||||
|
Hilary Hoynes |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Kenneth Judd |
Stanford | Bio/Vote History | ||
|
Carbon taxes go after the real problem efficiently. They raise revenues instead of increasing debt. Green subsidies are difficult to efficiently implement.
|
||||
|
Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Pete Klenow |
Stanford | Bio/Vote History | ||
|
|
||||
|
Jonathan Levin |
Stanford | Bio/Vote History | ||
|
|
||||
|
Eric Maskin |
Harvard | Bio/Vote History | ||
|
|
||||
|
William Nordhaus |
Yale | Bio/Vote History | ||
|
The first theorem of public finance is tax bad don't subsidize disparate goods.
|
||||
|
Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Emmanuel Saez |
Berkeley | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Larry Samuelson |
Yale | Bio/Vote History | ||
|
|
||||
|
José Scheinkman |
Columbia University | Bio/Vote History | ||
|
However, while one of the major political parties spouses "flat-earth" theories on climate change, there is no hope of passing carbon pricing.
|
||||
|
Richard Schmalensee |
MIT | Bio/Vote History | ||
|
Rent-seeking is not the major problem. Alternative ways of reducing carbon emissions are not treated equally, so costs would be substantially higher than necessary even without rent-seeking.
|
||||
|
Carl Shapiro |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Robert Shimer |
University of Chicago | Bio/Vote History | ||
|
|
||||
|
James Stock |
Harvard | Bio/Vote History | ||
|
Disagree b/c rent seeking is only one channel and not the most important. Multiple externalities so efficiency of subsidies depends on case. R&D subsidies can be efficient for green innovation, but subsidies for deploying wind & solar are less efficient than carbon tax.
-see background information here -see background information here |
||||
|
Richard Thaler |
Chicago Booth | Bio/Vote History | ||
|
Impossible to answer as posed. A subsidy *can* be just a negative tax or also a distortion. Not a well-posed question.
|
||||
|
Christopher Udry |
Northwestern | Bio/Vote History | ||
|
Full pricing of emissions is much more important than subsidizing new tech, but both are called for. Subsidies can address externalities from learning and networks
|
||||
