HKS Prof. Aldy Talks Clean Energy, Economic Policy at Belfer Center Webinar

Harvard Kennedy School professor Joseph E. Aldy discussed how policymakers can learn from past models to maximize the impact of current American energy legislation at a Monday webinar hosted by the Kennedy School’s Belfer Center for Science and International Affairs.

Kennedy School professor Robert N. Stavins moderated a discussion after Aldy’s presentation, entitled “Greening Economic Stimulus: Lessons from the 2009 Recovery Act.”

Aldy, who helped craft energy and economic policy during the Obama administration, emphasized the importance of drawing from past policies — such as the 2009 Recovery Act — given what he described as an ongoing deficit of new energy policy.

“The challenge we face today, though, is that we really haven’t seen any major energy legislation pass Congress and signed into law since 2009,” he said.

Aldy argued that the strengths and shortcomings of the 2009 Recovery Act can help inform future legislation. He specifically pointed to how the law facilitated a drastic increase in clean energy expenditure across the nation.

“We saw tremendous growth in renewable power. Wind power since 2008 has quadrupled. Solar power in the United States is 100 times the level of 2008,” he said.

Aldy also said certain flaws in the Recovery Act can serve as key lessons for the future. He identified non-essential subsidies, delayed implementation, and the withdrawal of non-federal partners as critical challenges.

“It’s really valuable if you’re able to crowd in additional resources from the private sector, or in some cases, crowd in cost-sharing from state and local governments,” Aldy said. “But it may be that your partners decide not to go forward with the project and then you don’t go forward with those investments.”

In a question-and-answer session following his presentation, Aldy compared the energy proposals put forward by Donald Trump and Joe Biden’s presidential campaigns. He argued that Trump has not proposed significant energy legislation while in office and that Biden seems relatively interested in promoting sustainable energy.

“When we spent about $100 billion, that was the largest energy bill ever, and now we’re talking about something that is an order of magnitude larger. So it’s potentially a really big spend that the Biden team has in mind,” Aldy said.

In an interview following the event, Stavins described how holding remote discussions due to the ongoing coronavirus pandemic has forced those in the Belfer Center’s Harvard Project on Climate Agreements — which coordinated the webinar series — to create novel ways of engaging with policy questions.

“We thought that the pandemic, requiring people in many cases to be remote and to be at home, actually provided an opportunity that we might not otherwise have to bring together a large number of people internationally who were interested in climate change and energy policy,” Stavins said. “And so that’s what we’ve done.”

Stavins also expressed his hope that audience members took away a more informed, nuanced understanding of American energy policy through the series.

“I hope that people will leave this session recognizing that here are some real opportunities, but also that it’s often more complex than it first appears,” he said.