We present quasi-experimental evidence that the timing of tax deductions matters for investments. Using firm-level data for Norway and the UK over 1995–2015, we estimate the effects of introducing immediate tax refunds paid out in cash in the Norwegian petroleum sector. We find a 63% increase in exploration investment and a 23% increase in the number of oil and gas discoveries. Consistent with the presence of financial frictions, the cash injection led oil companies to invest in projects that were economically profitable on average. The response was strongest among the firms most likely to be financially constrained. In sum, our empirical findings support the hypothesis that the timing of resource rent taxes matters when firms face financial frictions.

The Inflation Reduction Act (IRA) provides tax credits to encourage green hydrogen production. We analyze a model in which hydrogen produced using electricity replaces natural gas. The electricity is procured from dedicated renewables or from the grid with and without procuring clean electricity credits (offsetting). Optimal hydrogen subsidies are positive if the unpriced externality from natural gas is larger than the unpriced externality from electricity. With optimally differentiated subsidies, offsetting increases welfare. With undifferentiated subsidies, offsetting can decrease welfare, unless restricted to regions with higher unpriced electricity externalities. Short-run parameterization shows that the IRA’s subsidy of $3/kg-H₂ is rationalized (i) by hydrogen production from dedicated renewables if the social cost of carbon (SCC) is $500 or (ii) by hydrogen production from the (relatively clean and carbon-priced) grid in California with renewables offsetting electricity in the (relatively dirty and non-carbon-priced) grid in parts of the East if the SCC is $185.

Our analytical general equilibrium model investigates impacts of renewable portfolio standards (RPS) on electricity price, fossil-fuel use, renewable generation, and carbon emissions. Component effects include income, substitution, import, and direct policy effects. This breakdown helps explain how stricter RPS rules have ambiguous effects on renewable generation but negative effects on emissions. The model generates theorems and testable hypotheses about how these impacts depend on state characteristics like availability of renewable sources that are intermittent (sun, wind) or dispatchable (hydro, geothermal, biomass). We use state-level panel data from 1990 to 2015 to test these hypotheses. Our theorems and empirical tests provide most support for two hypotheses about states with stricter RPS requirements. First, having more dispatchable renewable potential is associated negatively with electricity prices and positively with fossil fuel use, emissions, and use of intermittent renewables. Second, having more wind intermittency is negatively associated with fossil fuel use and emissions.

Development of the abundant wind energy across the Great Plains of the United States has been relatively slow. We present a novel factor for the lag: the Ogallala Aquifer. Trade-offs between colocated natural resources are complicated by incongruencies between the scale and technology associated with each. This study considers how irrigation, especially by center pivots, has affected wind power generation. To study the relationship, we combine data on wind projects with center pivot locations derived from a deep learning model using satellite imagery. We find that center pivot fields are 64% less likely to have a wind turbine, and wind projects nearer to center pivots produce 26% less electricity, potentially due to turbine placement that minimizes interference with center pivots or irrigation’s microclimate effects on wind. This tension in the food-energy-water nexus can be exacerbated or ameliorated by policy choices.

We study how the adoption of battery electric vehicles—a key technology for decarbonizing transportation—responds to two local incentives: road toll exemption and bus lane access. Combining rich Norwegian microdata with a quasi-experimental research design where we exploit household-level variations in incentives on work commutes, we find sizable and positive effects on electric vehicle ownership. The increase in electric vehicles from having road tolls and bus lanes on work commutes is, on average, offset by a similar decline in the ownership of conventional vehicles. Still, road toll exposure increases total car ownership among the richest households. Road tolls also reduce “brown” driving per vehicle, but lower CO₂ emissions are largely due to the reduction in the number of conventional vehicles.

Climate change impacts on agriculture are mostly estimated by supply-side reduced-form regressions, under the implicit assumption of constant crop prices. To test whether this assumption is innocuous, I use a quantitative trade model of global agricultural markets to emulate the findings of a supply-side approach and to calculate welfare changes accounting for price changes. The results show that both welfare measures are weakly correlated and can be of opposite signs and that the supply-side approach tends to underestimate the cost of climate change because of the imperfect substitutability of crops in demand.

We exploit novel data from brain-training games to examine the impacts of air pollution on a comprehensive set of cognitive skills in adults. We find that exposure to particulate matter (PM2.5) impairs adult cognitive function and that these effects are largest for those in prime working age. These results confirm a hypothesized mechanism for the impacts of air pollution on workforce productivity. We also find that the cognitive effects are largest for new tasks and for those with low ability, suggesting that air pollution increases inequality in productivity.