39-612 Energy Policy and Economics

Professor Nicholas Muller
nzm@andrew.cmu.edu

Overview

This course will begin with a review of microeconomic concepts and tools necessary for analysis of the topics covered in the class. The course will explore how past energy technology policies and choices are intertwined with pathways of economic development, social impacts, macroeconomic measurement and performance. This course will explore how a wide variety of policy mechanisms- technology policy, utility regulation and restructuring, emissions policies, multilateral interventions and agreements, and corporate strategies-can shape energy use and the environmental impacts of energy systems. Study examples will draw from both developed and developing countries. 

Text: Reading assignments of relevant papers and reports will be made weekly in-class and via blackboard

Course Topics (tentative weekly schedule)

1. Introduction:  Connecting energy technologies to economics and global politics.  Discuss major sources of primary energy and compare and contrast renewables vs. traditional fossil fuels.  What are the main "levers" that can be pulled?

2. A brief and relevant history of Energy policy.

3. Patterns of energy supply and demand:  Electricity markets and their component parts, wholesale and retail competitive pricing, transmission pricing and placement.  Current and future approaches to regulation, and associated political implications.

4. Electricity markets 2:  supply of fuels, generation mixes and costing, and comparing developed to emerging nation systems. Utility regulation and restructuring occurring in developed and developing countries. How regulation and restructuring can affect technology and fuel choices and the environmental dimensions of electric power.

5. Transportation fuels: markets, primary resource, refinement, costing, use, potential of fleet electrification.

6. Policies and strategies affecting energy use: utility regulation and restructuring, multilateral interventions and agreements, and corporate strategic decision-making and investment.

7. Primary energy source - based policies:  Examine the interplay between policy and fossil vs. renewable energy sources.  Study the pros and cons of each.  

8. Technology-based policies: Examine how policy can impact technological development in the energy use sector.  Cover both end use technologies as well as energy production and transportation technologies.

9. Emissions-based policies. Cap and trade/Carbon tax.  How emissions reduction policies for the energy sector affect fuel and technology choices and energy use. Clean air act, emissions limits and pollution control requirements, emissions allocation and trading systems.

10. Consumption-based policies:  mandating efficiency and consumption in both electricity and transportation sectors

11. International participation, collaboration, and competition in the energy markets: UN, World Bank, Global Environment Facility, OPEC, Central Asia, others.  

12. Comparisons between countries:  compare and contrast different approaches applied around the world, in the context of the material presented thus far.  

13. The role of government and private investment firms in energy technologies and policy:  Emerging trends, bridging the technology development gap for highly scaled new technologies.

14. The next 100 years of energy technology and policy:  predictions, risks, and realities.