The Green Economy

Can Shareholder Democracy Fill the Void of a Dysfunctional Regulatory System?

As financial markets take on societal challenges like climate change, new research from Robin Döttling, Doron Levit, Nadya Malenko and Magdalena Rola-Janicka explores how shareholder democracy interacts with the political process to impact public goods provisions. The authors investigate the potential of investor-driven governance to supplement the shortfalls of the regulatory system, highlighting both benefits and risks posed by wealth inequality and ESG backlash.

The US Is Not Prepared for the AI Electricity Demand Shock

The United States power grid is increasingly strained by the surging electricity demand driven by the AI boom. Efforts to modernize the power infrastructure are unlikely to keep pace with the rising demand in the coming years. Barak and Eli Orbach explore why competition in AI markets may create an electricity demand shock, examine the associated social costs, and offer several policy recommendations.

Upgrading America’s Electricity Market Requires Downgrading Monopoly Utilities

Based on a new report from the Institute for Local Self-Reliance, John Farrell argues that the monopoly granted to private, investor-owned electric utilities by state governments is preventing the United States from accessing cheaper, cleaner, and more dependable electricity.

If You Care About the Climate, Should You Be Anti-AI?

Environmentally conscious critics of artificial intelligence worry about the massive amounts of energy and fresh water its data centers require. Alessio Terzi writes that in the long term, and with the help of government regulation, the benefits of AI-accelerated innovation will outweigh the short-term environmental costs we now observe.

The Limited Promise of Right-To-Repair Reforms

Roy Shapira discusses the problem of wasteful consumerism and society's throwaway culture, arguing that while the "right to repair" movement is important, antitrust policy is unable to address the underlying social and psychological drivers that push consumers to constantly purchase new items and can even hinder bottom-up pressures to reduce waste. Shapira analyzes various policy proposals and legal avenues to help change companies' and consumers' incentives in order to reduce environmentally harmful product obsolescence.

Investors Should Engage With Firms They Want To Go Green, Not Divest

How can investors use capital markets to encourage emissions reductions? In new research, Matthew E. Kahn, John G. Matsusaka, and Chong Shu examine whether public pension funds are more effective in mitigating pollution when they divest from fossil fuel companies or actively engage their management.

Brazil Demonstrates the Challenge of Balancing Growth and Sustainability

The return of Luiz Inácio Lula da Silva as president of Brazil accompanies a renewed emphasis on sustainability. However, discrepancies in his rhetoric and the policy of his administration reveals a rift between the administration’s twin goals of sustainability and economic development, writes Stephanie Tondo

Brazil’s CADE Demonstrates How Antitrust Authorities Can Pursue Sustainability Goals

Antitrust scholars and authorities are debating how antitrust can and should align with green sustainability initiatives. A recent ruling from Brazil’s antitrust authority, the Administrative Council for Economic Defense, in approving the launch of a commercial platform for agricultural commodity traders to track global supply chain sustainability metrics, presents one case study on how to advance sustainability goals without compromising competition.

ESG Standards’ Good, Bad and Ugly

The Stigler Center for the Study of the Economy and the State hosted a virtual event discussing the standards, metrics and disclosures of investments focused on Environmental, Social and Governance (ESG) goals. The following is a transcript of the event.

Electricity Markets Must Liberalize if We Are To Decarbonize Energy

In new research, Matteo Romagnoli argues that for the electricity sector to decarbonize as part of the broader green transition, regulators must liberalize markets...

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