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  5. The Economics of the Global Energy Challenge

AEA Papers and Proceedings

ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)

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The Economics of the Global Energy Challenge

  • Michael Greenstone
AEA Papers and Proceedings
vol. 114, May 2024
(pp. 1–30)
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Abstract

Rather than facing an isolated climate change challenge, this paper argues that the world must confront the Global Energy Challenge (GEC) that requires all countries to make trade-offs between three often competing and interrelated goals: inexpensive and reliable energy, clean air, and limiting damages from climate change. This paper presents seven facts that help illuminate the contours of the GEC and the interactions between the three goals. It concludes by outlining potential solutions: pricing energy at its full social cost, investing in technical and policy innovation, improving information on pollution and climate damages, and treating energy as a private good.

Citation

Greenstone, Michael. 2024. "The Economics of the Global Energy Challenge." AEA Papers and Proceedings, 114: 1–30. DOI: 10.1257/pandp.20241000

Additional Materials

JEL Classification

  • Q41 Energy: Demand and Supply; Prices
  • Q42 Alternative Energy Sources
  • Q48 Energy: Government Policy
  • Q53 Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
  • Q54 Climate; Natural Disasters and Their Management; Global Warming
  • Q58 Environmental Economics: Government Policy