Question A:
For reducing global greenhouse gas emissions, subsidies for R&D on low-carbon technologies are justified in addition to carbon pricing mechanisms like carbon taxes and cap-and-trade systems.
Responses
Responses weighted by each expert's confidence
Question B:
Higher subsidies for R&D on low-carbon technologies are justified by the fact that their successful deployment would not only reduce emissions in OECD countries but also reduce developing countries' emissions by encouraging them to substitute away from fossil fuels.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Franklin Allen |
Imperial College London | Bio/Vote History | ||
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The Chinese have already made great progress on low carbon technologies through subsidies. The question is how many further subsidies are needed. Solar cells, wind turbine and electric vehicles are not far off where they need to be. SOme like planes may need more.
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 Pol Antras |
Harvard | Bio/Vote History | ||
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 Emmanuelle Auriol |
Toulouse School of Economics | Bio/Vote History | ||
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 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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 Richard William Blundell |
University College London | Bio/Vote History | ||
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 Maristella Botticini |
Bocconi | Bio/Vote History | ||
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 Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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 Julia Cagé |
Sciences Po | Bio/Vote History | ||
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First, I am not fully convinced by the fact that carbon pricing mechanisms are efficient at reducing global greenhouse gas emissions. The evidence in the literature is still mixed.
Second, I think that selecting "good" low carbon technologies remains challenging.
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 Elena Carletti |
Bocconi | Bio/Vote History | ||
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 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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 Paul De Grauwe |
LSE | Bio/Vote History | ||
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 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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 Antonio Fatás |
INSEAD | Bio/Vote History | ||
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 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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 Luis Garicano |
LSE | Bio/Vote History | ||
 Yuriy Gorodnichenko |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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 Sergei Guriev |
London Business School | Bio/Vote History | ||
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 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Justification is from inability of the inventor to capture enough of the social value of such technology.. Subsidy design would need to be good, though.
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 Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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Subsidies may be justified if new technologies (R&D and early stage) face entry barriers in established markets.
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 Botond Kőszegi |
Central European University | Bio/Vote History | ||
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 Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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The climate challenge involves essentially two externalities. Carbon pricing or similar mechanisms address carbon emissions (neg ext). Subsidies target underinvestment in R&D in the area of low- or zero-carbon technologies. Pos. externality due to spillovers.
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 Kalina Manova |
University College London | Bio/Vote History | ||
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 Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
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 Costas Meghir |
Yale | Bio/Vote History | ||
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 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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 Elias Papaioannou |
London Business School | Bio/Vote History | ||
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 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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 Richard Portes |
London Business School | Bio/Vote History | ||
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 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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 Carol Propper |
Imperial College London | Bio/Vote History | ||
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 Imran Rasul |
University College London | Bio/Vote History | ||
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 Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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 Ricardo Reis |
London School of Economics | Did Not Answer | Bio/Vote History | |
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 Rafael Repullo |
CEMFI | Bio/Vote History | ||
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 Antoinette Schoar |
MIT | Bio/Vote History | ||
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 Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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 Per Strömberg |
Stockholm School of Economics | Bio/Vote History | ||
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The green transition is in need of new technology, especially for decarbonizing industry. The economic case for R&D subsidies is strong in general e.g. Romer's classical work, and for climate-related technologies in particular (e.g. Acemoglu et al, AER 2012).
-see background information here -see background information here |
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 Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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 Silvana Tenreyro |
LSE | Bio/Vote History | ||
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 Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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These subsidies are necessary since the market fails to internalise the benefits from scaling up and learning-by-doing effects. They are also necessary to redirect from carbon-intensive to green R&D and innovation.
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 John Vickers |
Oxford | Bio/Vote History | ||
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Such R&D has positive externalities
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 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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if the carbon price is right, it should provide resources for low-carbon technology. With subsidies, there is a risk of inefficient investment.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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Again the issue is how much more is needed given the great progress the Chinese have made.
-see background information here |
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Pol Antras |
Harvard | Bio/Vote History | ||
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Emmanuelle Auriol |
Toulouse School of Economics | Bio/Vote History | ||
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Fossil energies are limited and are the main engine of global warming. Energy is the engine of growth. So we need a big push in R&D to find clean substitute. Everybody will benefit from it.
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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Richard William Blundell |
University College London | Bio/Vote History | ||
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Maristella Botticini |
Bocconi | Bio/Vote History | ||
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Julia Cagé |
Sciences Po | Bio/Vote History | ||
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If one is able to pick successfully the low-carbon technologies of the future, for sure we need them to be implemented both in rich and developing countries, and subsidies can help at doing so.
But an alternative approach would be to reduce emissions by reducing the use of energy
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Antonio Fatás |
INSEAD | Bio/Vote History | ||
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Luis Garicano |
LSE | Bio/Vote History | ||
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The externality argument is clear (and I referred the literature on my previous post). The capture problem and the ways subsidise will in fact be deployed is much less clear.
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Yuriy Gorodnichenko |
Berkeley | Did Not Answer | Bio/Vote History | |
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Sergei Guriev |
London Business School | Bio/Vote History | ||
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Additional arguments in favor of R&D subsidies include standard non-excludability and non-rivalry of knowledge
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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absolutely...
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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Key will be to make sure these new technologies are also available to developing countries. A technology transfer would make sense not only in addressing future emissions (of which 80% will be in developing ctries) but also considering that historical emissions of OECD ctrys.
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Kalina Manova |
University College London | Bio/Vote History | ||
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Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
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Costas Meghir |
Yale | Bio/Vote History | ||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Elias Papaioannou |
London Business School | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Absolutely, this is the only way to truly move the needle globally. The vast majority of future carbon emissions will come from countries outside the West. Whether and when those countries decarbonize will be first-order to future global temperatures.
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Richard Portes |
London Business School | Bio/Vote History | ||
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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Imran Rasul |
University College London | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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Ricardo Reis |
London School of Economics | Did Not Answer | Bio/Vote History | |
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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Per Strömberg |
Stockholm School of Economics | Bio/Vote History | ||
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In principle true, but less sure about empirical evidence on such trickle down. Developing countries may have institutional constraints impeding technology adoption.
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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Silvana Tenreyro |
LSE | Bio/Vote History | ||
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Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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