By Lydia DePillis
Economists have been examining the impact of climate change for almost as long as it’s been known to science.
In the 1970s, the Yale economist William Nordhaus began constructing a model meant to gauge the effect of warming on economic growth. The work, first published in 1992, gave rise to a field of scholarship assessing the cost to society of each ton of emitted carbon offset by the benefits of cheap power — and thus how much it was worth paying to avert it.
For Ryan Kellogg, an energy economist who worked as an analyst for the oil giant BP before getting his Ph.D., that was a key realization. Leaving an economics department for the public policy school at the University of Chicago, and working with an interdisciplinary consortium including climate scientists, impressed on him two things: that fossil fuels needed to be phased out much faster than previously thought, and that it could be done at lower cost.
Just in the utility sector, for example, Dr. Kellogg recently found that carbon taxes aren’t meaningfully more efficient than subsidies or clean electricity standards in driving a full transition to wind and solar power. And as more essential devices can be powered by batteries, affordable electricity becomes paramount.
“If you want to get rid of some of the carbon but you don’t think it’s worthwhile to invest in deep decarbonization, keeping a price on carbon is probably a good idea,” Dr. Kellogg said. “If you’re going to zero, and really cleaning the grid, you want to use that clean electricity to electrify other stuff, and you want it to be cheap.”