Joe Aldy - Harvard
Capital versus Output Subsidies: Implications of Alternative Incentives for Wind Investment
Date: 09/03/2015 (Thu)
Time: 3:15pm- 4:45pm
Location: Seminar will be held on-site: Building 09/CR 137, RTI International
Organizer: Sarah Tung
Meeting Schedule: Login or email the organizer to schedule a meeting.
All meetings will be held in the same location as the seminar unless otherwise noted.
9:00am - Brian Murray - 2117 Campus Drive, EH 4102, or somewhere near Allen bldg
10:00am - Randy Kramer - anywhere in Environment or Rubenstein
10:30am - Subhrendu Pattanayak - Rubenstein 126
11:00am - Brian Prest - anyone around Gross Hall or Rubenstein
11:30am - Marc Jeuland - Rubenstein 188
12:00pm - Justin Kirkpatrick - Probably Rubenstein (flexible)
3:15pm - Seminar Presentation (3:15pm to 4:45pm)
Additional Comments: From a public finance perspective, is it better to subsidize inputs or outputs? We examine the choice between a capital subsidy and an output subsidy in the case of wind energy in the United States where, in some cases subsidies support investment in a specific technology, while in other cases subsidies support output from qualifying technologies. Exploiting a natural experiment in which wind farm developers could choose between investment and output subsidies, we estimate the impact of this choice on project productivity, and then use these estimates to evaluate the public economics of U.S. wind energy subsidies. Using a fuzzy regression discontinuity modeling framework, we find that wind farms choosing the capital grant realize 11% lower generation than those wind farms selecting the output subsidy. The Federal government expends about one-quarter more per kilowatt-hour of power produced under the capital subsidy than the output subsidy.