The Energy Transition: An Industrial Economics Perspective

46 Pages Posted: 11 Feb 2021 Last revised: 31 Mar 2021

See all articles by Natalia Fabra

Natalia Fabra

Universidad Carlos III de Madrid - Departmento de Economia

Date Written: January 2021

Abstract

Addressing climate change requires full decarbonization of our economies. Whether this objective is achieved at least cost for society hinges on good policy design. In turn, this calls for a thorough understanding of firms' and consumers' incentives in the presence of asymmetric information, the determinants of strategic interaction, and the impact of market design and market structure on the intensity of competition. Industrial Economics thus has much to contribute towards a successful Energy Transition, while benefiting from the exciting research opportunities it brings. In this paper, I survey some of the recent developments in this area. My focus is on the power sector, and in particular, on the regulatory and market design challenges triggered by the expansion of intermittent renewables with almost zero marginal costs. I conclude with some questions that merit further research.

JEL Classification: L22, L94

Suggested Citation

Fabra, Natalia, The Energy Transition: An Industrial Economics Perspective (January 2021). CEPR Discussion Paper No. DP15705, Available at SSRN: https://ssrn.com/abstract=3783929

Natalia Fabra (Contact Author)

Universidad Carlos III de Madrid - Departmento de Economia ( email )

E-28903 Getafe (Madrid)
Spain
+34-91 6249594 (Phone)
+34-91 6249329 (Fax)

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