PUBLICATIONS
The Gas Trap: Outcompeting Coal vs. Renewables (with Bård Harstad). Journal of Political Economy (Forthcoming).
The Dynamics of Linking Permit Markets (with Kristoffer Midttømme). Journal of Public Economics, Vol. 198, 2021.
Supply-Side Climate Policy in Norway. Nordic Economic Policy Review, 2019: Climate Policies in the Nordic countries.
Faustmann and the Climate (with Bjart Holtsmark and Michael Hoel). Journal of Forest Economics, 20(2), 2014.
Optimal Harvest Age Considering Multiple Carbon Pools - A comment (with Bjart Holtsmark and Michael Hoel). Journal of Forest Economics, 19(1), 2013.
WORKING PAPERS
Shock Therapy for Clean Innovation: Within-firm Reallocation of R&D Investments (with Esther Ann Bøler and Karen Helene Ulltveit-Moe)
We study how a negative profitability shock in the fossil energy supply chain affects firms’ direction of innovation. We develop a stylized model to show that adjustment costs in R&D create incentives for exposed firms to reallocate innovation toward clean technologies. Next, we propose a novel method to identify firms’ exposure to the 2014 oil price collapse, and find that more exposed firms significantly increased clean R&D relative to less exposed peers. The results suggest that firms in the fossil energy supply chain possess transferable capabilities for clean innovation, and that declining fossil profitability—e.g., via carbon pricing—can accelerate the clean transition along the fossil energy supply chain.
Can Revenue Recycling Kill Green Technology?
Carbon tax revenue recycling -- returning tax revenue to firms or households that are covered by the carbon tax -- can potentially increase political acceptance for carbon taxation and prevent undesirable distributional outcomes and off-shoring. This paper uses a stylized theoretical model to analyze the long-run effects of carbon tax revenue recycling in a sector where there are knowledge spillovers between firms. The paper shows that recycling tax revenue to polluting firms can impede incentives to invest in green innovation and, in some settings, completely curb green investment. This is the case even if the individual transfers are small relative to aggregate government revenues and not contingent on firm-level emissions or investment levels. The disincentive to invest when revenues are recycled arises because a firm investing in green innovation may lower not only their own emissions, but also those of other firms, when there are knowledge spillovers between them. When revenues are recycled, the emission reductions from the rest of the industry will lower the transfer received by the investing firm.
Is the Marginal Cost of Public Funds Sensitive to the Choice of Taxed Goods? (with Bjart Holtsmark).
The Marginal Cost of public Funds (MCF) is a measure of the marginal costs of taxation. The main contribution of this paper is to disentangle the confusion in the literature concerning the sensitivity of the MCF to the choice of taxed goods. Specifically, we show that the MCF is invariant to the choice between direct and indirect taxation, in the second-best allocation.