Publications

Slouching or Speeding Toward Net Zero? Evidence from COVID-19 Stimulus Policies in the G20

Joint with Basma Majerbi (UVic Gustavson) and Ekaterina Rhodes (UVic Public Administration)

Ecological Economics, Volume 201, November, 2022.

This paper analyzes the size and nature of green fiscal stimulus policies in the G20 countries in response to the COVID-19 crisis, with a focus on the energy sector. We exploit a new dataset, the Energy Policy Tracker (EPT), with detailed information on countries’ policies since the start of the pandemic. Between January 2020 and December 2021, G20 countries enacted 913 stimulus measures that have direct impacts on energy supply and demand. The average country spent $397 USD per person on energy-related policies. Only 30% of this amount, on average, is devoted to low-carbon measures, mostly in the transit and buildings sectors, with considerable variation across countries. To properly compare countries’ efforts in aligning their COVID-19 stimulus with climate goals, we construct a new index, the Green Energy Policy Index (GEPI), using principal components analysis, taking into account both “green” and “brown” stimulus measures. The GEPI varies considerably across countries. We find that on average, countries with a “greener” energy-related stimulus are wealthier and have a lower emission intensity. On average, countries that have experienced the crisis more acutely, both in terms of deaths and gross domestic product (GDP) loss, have “greener” stimulus packages. We discuss the implications of these findings for future research and climate energy policymaking.

Working Papers

Assessing Model Disagreement in Climate Scenarios: Tools for Investors

Joint with Basma Majerbi and Michael King (UVic Gustavson)

Large asset owners are using forward-looking climate scenarios to model the impact of transition risks on financial and real assets. These investors face challenges when incorporating outputs into investment decision making. First, competing providers use proprietary models and methodologies that generate different projections for the same emissions pathway. Second, there are data gaps when translating top-down, macroeconomic outputs from climate scenarios into the bottom-up inputs required by financial valuation and risk models. This paper develops a methodology to assess model disagreement when combining outputs from different climate scenarios. We quantify the range of outcomes for a given variable (e.g. primary energy demand or total emissions) in a given emissions scenario (e.g. net zero), which we call model disagreement. We then show how to fill the data gaps for key macroeconomic drivers. We illustrate our methodology using the climate transition scenarios from the International Energy Agency (IEA) and the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). We generate an integrated, interactive database of socio-economic, environmental, and energy-related variables that incorporates metrics quantifying the variation across models and scenarios. This methodology allows investors to make an informed choice when testing the sensitivity of their investment portfolios to climate transition risks.

Decomposing Canadian Greenhouse Gas Emissions and Economic Activity: A Sectoral and Regional Analysis

Joint with Mamoon Kader and Hashmat Khan (Carleton University)

The Canadian government has committed to reducing emissions to at least 40% below 2005 levels by the year 2030. A variety of spending, carbon pricing and regulatory measures are proposed as a means for accomplishing this goal. The future impacts of these policies are difficult to project due to geographic and industrial heterogeneity in carbon intensity. This paper constructs a database of direct emissions measures at the province by industry level for the years 2009-2018. We apply statistical decomposition methods to quantitatively measure the scale effect, provincial composition effect, industrial composition effect and the technique effect. We find a large positive scale effect due to economic growth and a large negative technique effect due to reductions in emissions intensity at the industry level. On balance, emissions have increased moderately over our sample period. The technique effect is driven almost entirely by reductions in emissions intensity in the oil and gas and electricity generation sectors. The technique effect for electricity generation is concentrated in Ontario and Alberta while the technique effect for oil and gas is concentrated in Alberta, British Columbia. In an additional contribution we abstract from the provincial composition effect and break the technique effect up into an energy efficiency technique effect and an emissions intensity technique effect. We find that both are quantitatively important but that improvements in energy efficiency have contributed twice as much as improvements in emissions intensity per unit of energy to the technique effect.

The Landscape of Heat Pump Adoption in Canada: A Market Segments Approach

Joint with Ekaterina Rhodes (UVic), Aaron Pardy (SFU) and Severin Odland (UVic)

Heat pumps are a critical technology for reducing residential building emissions, however their adoption rate in North America is far below what is needed to meet emission reduction targets. This paper uses the Canadian Home Heating Survey (n=3,804) to identify and describe characteristic and attitudinal trends of four market segments of Canadian homeowners: Pioneers (heat pump owners), Potential Early Mainstream buyers (homeowners currently willing to purchase a heat pump), Potential Mainstream buyers (homeowners currently undecided on purchasing a heat pump), and Potential Late Mainstream buyers (homeowners currently unwilling to purchase a heat pump). We find that, relative to other market segments, Potential Early Mainstream (PEM) buyers are younger, more educated, live in larger households, live inare more urban areas, are newer homeowners, and have more positive views on heat pumps than other non-Pioneer segments. We also find that Potential Mainstream (PM) buyers are more likely to be female, the leassst likely to know a heat pump owner, and are the least more unfamiliar with heat pumps, relative to other market segments. We find that Potential Late Mainstream (PLM) buyers are more male, older, less wealthy, live in smaller households, have owned their homes for longer, vote more frequently relative to non-Pioneer segments, and have more negative attitudes towards heat pumps than other segments. The implications of these findings on strategies to increase heat pump adoption are discussed. 

Permanent Working Paper

R&D and Productivity: The Effects of Heterogeneity and Uncertainty

In this paper I examine the effects of R&D spending on revenue productivity over the life cycle of publicly traded manufacturing firms. I do this by estimating a gross production function and recovering a controlled Markov process which allows productivity to depend on age since listing, lagged productivity and R&D spending. I use a novel identification strategy to isolate the non-linear effects of R&D on productivity over the life cycle. I also estimate the effects of R&D on the volatility of revenue productivity. I find that R&D has non-linear effects on both the mean and the variance of productivity. In particular, more mature firms are more efficient at converting R&D spending into productivity and engage in R&D which is more uncertain. Firms with higher revenue productivity are also more efficient at turning R&D inputs into future productivity. My findings suggest that the R&D process is non-linear and uncertain.

Paper

In Progress

Cross-country Contextual Drivers of Climate Policy Support, with Ekaterina Rhodes (UVic)

Green Fiscal Stimulus in Canada During the COVID-19 Pandemic

Dissertation

Essays on US Business Dynamics - Queen’s University