The Green Economy

The United States power grid is increasingly strained by the surging electricity demand driven by the AI boom. Efforts to modernize the power infrastructure are unlikely to keep pace with the rising demand in the coming years. Barak and Eli Orbach explore why competition in AI markets may create an electricity demand shock, examine the associated social costs, and offer several policy recommendations.

Based on a new report from the Institute for Local Self-Reliance, John Farrell argues that the monopoly granted to private, investor-owned electric utilities by state governments is preventing the United States from accessing cheaper, cleaner, and more dependable electricity.

Environmentally conscious critics of artificial intelligence worry about the massive amounts of energy and fresh water its data centers require. Alessio Terzi writes that in the long term, and with the help of government regulation, the benefits of AI-accelerated innovation will outweigh the short-term environmental costs we now observe.

Roy Shapira discusses the problem of wasteful consumerism and society's throwaway culture, arguing that while the "right to repair" movement is important, antitrust policy is unable to address the underlying social and psychological drivers that push consumers to constantly purchase new items and can even hinder bottom-up pressures to reduce waste. Shapira analyzes various policy proposals and legal avenues to help change companies' and consumers' incentives in order to reduce environmentally harmful product obsolescence.

How can investors use capital markets to encourage emissions reductions? In new research, Matthew E. Kahn, John G. Matsusaka, and Chong Shu examine whether public pension funds are more effective in mitigating pollution when they divest from fossil fuel companies or actively engage their management.

The return of Luiz Inácio Lula da Silva as president of Brazil accompanies a renewed emphasis on sustainability. However, discrepancies in his rhetoric and the policy of his administration reveals a rift between the administration’s twin goals of sustainability and economic development, writes Stephanie Tondo

Antitrust scholars and authorities are debating how antitrust can and should align with green sustainability initiatives. A recent ruling from Brazil’s antitrust authority, the Administrative Council for Economic Defense, in approving the launch of a commercial platform for agricultural commodity traders to track global supply chain sustainability metrics, presents one case study on how to advance sustainability goals without compromising competition.

The Stigler Center for the Study of the Economy and the State hosted a virtual event discussing the standards, metrics and disclosures of investments focused on Environmental, Social and Governance (ESG) goals. The following is a transcript of the event.

In new research, Matteo Romagnoli argues that for the electricity sector to decarbonize as part of the broader green transition, regulators must liberalize markets...

Efficiency is out and political economy is in. But what does that imply about making good policy? When Barack Obama was asked about carbon pricing...