Department of Economics Spring 2018 Seminar Series

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Date(s) - 01/22/2018
4:00 pm - 5:30 pm

Andrew G. Clark Building

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The Department of Economics Seminar Series for the Spring 2018 term continues on Monday, 1/22/18. This seminar is open to everyone and will be held in the Clark building, room A203, at 4:00pm.

January 22nd’s speaker is Dr. Itziar Lazkano, an Assistant Professor in the Department of Economics at the University of Wisconsin-Milwaukee. Professor Lazkano earned her PhD in Economics at the University of Calgary. Her research interests include economic growth, environmental and resource issues, and macroeconomics.

Professor Lazkano will be presenting her paper “Which fossil fuel taxes promote innovation in renewable electricity generation?”


We evaluate the role of a fossil fuel tax and research subsidy in directing innovation from fossil fuel toward renewable energy technologies in the electricity sector. Using a global firm-level electricity patent database from 1963 to 2011, we find that the impact of fossil fuel taxes on renewable energy innovation varies with the type of fossil fuel. Specifically, a 1 0% increase in the coal price reduces innovation in renewable energy technologies by 3.6% while a higher natural gas price has no statistically significant impact on renewable energy innovation. The reason is that easily dispatchable energy sources (e.g., coal-fired power) need to complement renewable energy technologies (e.g., wind or solar) in the grid because renewables generate electricity intermittently. Our results suggest that a tax on natural gas, combined with research subsidies for renewable energy, may effectively shift innovation in the electricity sector towards renewable energy. In contrast, coal taxation or a carbon tax that increases coal prices has unintended negative consequences for renewable energy innovation.