The University of Massachusetts Amherst

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Climate Change Economics

UMass expert examines energy policy in the face of climate change
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“Renewables are not on an even playing field because we’re not considering all of the costs of climate change from fossil-fuel sources."

—Erin Baker

One of the most pressing economic decisions that must be considered regarding current energy portfolios is the cost of climate change. UMass Amherst professor Erin Baker, an expert in decision making under uncertainty, studies the many economic factors and policy decisions associated with renewable energy development.

“My focus is on decision making, and decision making under uncertainty. A lot of my work is thinking about energy technology, research and development projects in the face of climate change. The question is ‘what should governments invest in right now so that it'll be cheaper and easier to respond to climate change in the future’,” says Baker.

Baker and her team of PhD students develop recommendations and provide insights to policy makers on how they should allocate their research and development money; how much should they allocate to solar, to nuclear, and how they should be thinking of these investments. They test different policy scenarios and models, helping to shed light on how certain decisions can help drive down the costs associated with renewable energy development and its related impacts on climate change.

“Right now we’re trying to understand the sustainability of the New England electricity grid. We are looking at the different types of electricity generation, and looking at possible different combinations of those in the future to evaluate how sustainable they are. This is intended to help policy makers and other stakeholders think about the direction they want to go,” says Baker.

"The question is ‘what should governments invest in right now so that it'll be cheaper and easier to respond to climate change in the future’."

On a larger scale, Baker and her team help shed light on the real costs of energy technologies, taking into consideration the impact each technology has on climate and society. While dirty energies such as coal and oil appear to reap financial benefits in the short term, cost analyses do not typically include the downstream costs to society, says Baker. “Renewables are not on an even playing field because we’re not considering all of the costs of climate change from fossil-fuel sources. That’s a big advantage to coal and natural gas. They're creating all these costs to society and they're not paying for them,” says Baker.

For renewable tech such as offshore wind to be developed and implemented on a large scale, thus reducing the societal impacts of climate change, it needs to be economically competitive to existing energy sources. “Streamlining policies, appropriately allocating funding, and accurately estimating efficient energy portfolios are essential aspects to clean technology development. If policies required coal, natural gas and oil to reflect associated costs of climate change it puts the costs of renewables on a more even playing field,” says Baker.  As these technologies become competitive in many regions, people will invest, she adds.

For offshore wind in particular, Baker’s team helps policy makers and stakeholders understand the issues surrounding offshore wind siting. She says developing a sensible, streamlined and coherent policy and regulatory process for siting and operating is very important for the industry.

“We don’t want to run over any group of stakeholders, but at the same time we want these offshore wind farms to be built where it makes sense for them to be built,” says Baker.

Baker is also concerned with growing a national workforce knowledgeable about renewable energy technology and economy. She sees a huge potential in the graduate students that come to the University of Massachusetts. As the Director of the National Science Foundation-funded Integrative Graduate Education Traineeship (IGERT) program at UMass, she led over 30 doctoral students through an interdisciplinary fellowship in offshore wind energy. The NSF-funded program has graduated into The Wind Energy Fellows, a program that not only equips students to enter the industry with a diverse education, but also brings an eclectic mix of interdisciplinary perspectives to the Wind Energy Center, allowing for a broader scope of research. IGERT projects include data collection, fieldwork, cross-disciplinary collaboration and an industry perspective. Together, these provide useful insights about offshore wind technologies, supporting their development and informing industry policies.

“IGERT is really about how to get the social science piece, the environmental science piece, and the engineering technology piece talking to each other, so that we can really move the offshore wind industry forward in the United States,” Baker said. “I think it’s helpful in that sense that we have this body of students and body of work that is broadly applicable to the challenges of actually siting and operating these offshore wind farms.”

For more on the economics of offshore wind, read the white paper that Erin Baker and other UMass professors and researchers contributed to here.

Katherine Kelley '20

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