Stanford University

To develop and apply a framework that classifies, assesses, and compares the explicit and implicit subsidies provided for different energy sources

  • Amount $600,000
  • City Stanford, CA
  • Investigator Frank Wolak
  • Year 2016
  • Program Research
  • Sub-program Energy and Environment

Federal and state governments provide a wide array of direct and indirect subsidies to many energy supply technologies. Since these subsidies affect the economic competitiveness of different energy sources, it is important to develop objective and accurate estimates of their magnitude. Funds from this grant support work by Frank Wolak, a senior energy economist at Stanford, to develop a standardized schema for the categorization of different forms of government subsidy. Wolak will then collaborate with other leading energy economists to apply this framework and undertake a series of technology-specific analyses that will quantify the extent of subsidies provided to various energy sources, such as coal, natural gas, oil, wind, solar, and nuclear. All participating researchers will then convene at a workshop to review and compare each of these analyses and suggest areas of improvement. Finally, Wolak will develop a general equilibrium model that extends the results of these source-specific subsidy analyses and accounts for interactions between subsidies for different energy sources. He will consider, for example, how changes in the subsidies provided for wind power impact subsidies provided for other energy sources, such as oil or gas. This general equilibrium methodology will be the subject of a second review workshop, and the whole project will culminate in a series of final conferences that will lay out the ultimate findings for researchers and policymakers.

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