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  5. Energy Transitions
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Energy Transitions

Paper Session

Sunday, Jan. 4, 2026 2:30 PM - 4:30 PM (EST)

Philadelphia Convention Center, 303-B
Hosted By: Association of Environmental and Resource Economists
  • Chair: Erik Katovich, University of Connecticut

Climbing the Energy Ladder: How Energy Resources Hinder, Facilitate, and Fuel Economic Growth

Derek Lemoine
,
University of Arizona

Abstract

I show that the nature of the energy resources available to an economy qualitatively determines long-run growth outcomes. A harvested resource such as biomass drags on growth, a mined resource such as coal enables output per capita to hold constant, and both a tapped resource such as oil and a manufactured resource such as solar panels risk degrowth if energy return on energy invested (EROI) cannot stay above a threshold. The only energy resource that can fuel long-run growth is a manufactured resource such as solar panels. Either that resource must rely on substitutable energy inputs that have a sufficiently large EROI, or it must be produced by robots that are themselves produced from robots and energy. In ongoing work, I aim to numerically explore the implications for energy transitions in response to climate change.

Powering the Future: The Long-Term Human Capital Effects of Rural Electrification

Pan Chen
,
University of Colorado-Boulder

Abstract

This paper examines how exposure to rural electrification during middle childhood affected long-term human capital in 1990s China. Unlike most studies that focus on grid connection, this paper emphasizes electricity affordability. I develop a model of human capital investment where rural electrification is an adult-labor-biased technical change. The model predicts a strong income effect and a negligible substitution effect, resulting in increased schooling for children. I test this empirically using a cohort difference-in-differences design, leveraging variation in electricity price reductions across counties. I find that middle childhood exposure to lower electricity prices significantly increases educational attainment, school completion, and adult cognitive scores. Further analysis identifies increased agricultural productivity as a key mechanism, consistent with the model. The focus on middle childhood reflects children's limited substitutability for adult laborers at this age. At older ages, children provide labor that closely resembles that of adults, and a strong substitution effect may offset the income effect—evidence supports this prediction. China's late-1990s experience offers insights for rural electrification efforts in many developing countries today.

The Impact of the Energy Transition on Local Mortality

Dylan Brewer
,
Georgia Institute of Technology
Eleanor Krause
,
University of Kentucky
Jancy Ling Liu
,
College of Wooster

Abstract

The health consequences of sectoral transitions are theoretically ambiguous. Re- duced industrial activity and associated pollution reductions may be health-improving, while job loss and local economic disruption may worsen health. This paper exam- ines these competing forces in the context of coal’s decline, which generated well- documented economic losses for exposed workers and regions at the same time that falling coal-fired generation improved downwind air quality. We link restricted-access, cause-specific mortality data from 2004 to 2019 with detailed records of coal plant and mine activity. Combining staggered difference-in-differences and continuous variation in coal decline across U.S. commuting zones, we find that coal-fired capacity retirements reduce pollution-related mortality among older adults, while both coal power and min- ing sector contractions increase drug-overdose deaths among working-age adults. On net, mining contractions lead to clear increases in local, all-cause mortality, while power plant retirements yield large, but statistically imprecise reductions.

Can Place-Based Incentives Accelerate the Energy Transition? Evidence from the IRA’s Energy Community Tax Credits

Gaurav Doshi
,
Georgia Institute of Technology
Jancy Ling Liu
,
College of Wooster
Xiaochen Sun
,
New Mexico State University

Abstract

This paper examines the design and effectiveness of place-based industrial policy in renewable energy. We study the Inflation Reduction Act's energy-community tax credits, which offer bonus subsidies to projects sited in economically vulnerable, fossil-fuel reliant areas. Using synthetic difference-in-differences we find modest increases in interconnection requests in eligible counties but sizable declines in the most distressed locations that satisfy multiple criteria. We then develop and estimate a structural model of project location choice to evaluate alternative policy designs. Counterfactual simulations highlight key trade-offs between developer surplus, avoided environmental damages, fiscal costs, and support for vulnerable communities in designing place-based incentives for renewable investment.

Discussant(s)
Geoffrey Heal
,
Columbia University
Shefali Khanna
,
London School of Economics
Todd Gerarden
,
Cornell University
Erik Katovich
,
University of Connecticut
JEL Classifications
  • Q4 - Energy
  • O1 - Economic Development