🚨 Job Market Paper Alert🚨. What happens when OPEC’s market power meets climate policies? 🌍💡. Check out my JMP ‘Pump it? Market Power and the Energy Transition in the Global Oil Market’ 🧵 (1/10). Website: Paper: #EconTwitter

RT @frankverboven: Three musketeers - three fresh KU Leuven PhDs in Inustrial Organization!. Honghao Zheng @honghao_zzz , William Burton @w….

RT @cepr_org: Exciting ideas from emerging scholars! 1st day of the lunchtime PhD poster sessions at #CEPRParis2024. @c_decanniere @LeuvenE….

RT @honghao_zzz: Hey #EconTwitter!📢📢📢. Here is a 🧵 on my Job Market Paper!. “Death by Market Power: The Production-Safety Tradeoff in the C….

RT @GastFernandezB: Hi #EconJobMarket . 🚨Job Market Paper alert🚨. "Parental personality and child skills formation". ❓How does parental per….

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RT @philipp_ludwig_: 🚨Job market paper🚨.Container ships are vital for global trade & large emitters of CO2. What happens when we tax their….

Take-away?.Good climate policy anticipates strategic responses from oil producers. This paper shows how understanding #MarketPower can help policymakers turn #decarbonization into opportunities for global welfare gains.🌍🌎🌏 (10/10) @LeuvenEconomics.

So, what’s the optimal #CarbonTax?. 1️⃣ Start slightly lower than the social cost of carbon. 2️⃣ Increase faster than the social cost of carbon to capture those additional welfare gains. (9/10).

Compared to a flat tax, an 📈increasing carbon tax 📈heavily reduces inefficiencies. By reallocating market share to lower-cost fields, it achieves a win-win for emissions and welfare. (8/10)

Why?.Under OPEC’s market power, production is withheld from the most efficient fields. Anticipation of stricter carbon policies erodes this distortion, leading to large welfare gains as production shifts toward efficient producers. 🌍 (7/10)

What do I find?. 1️⃣OPEC exerted market power from 1990–2019 but didn’t fully exploit it. 2️⃣Carbon taxes can accelerate short-term production (green paradox). 3️⃣BUT under imperfect competition : Taxes also reallocate production, reducing inefficiencies and boosting welfare. (6/10).

To get this answer, I build and estimate a dynamic structural model of global oil production. Using micro-level data, I capture OPEC's balancing act:. ⚖️slow production to boost prices today ⏬.⚖️OR pump faster to avoid future losses from stricter policies ⏫. (5/10).

My JMP dives into this tension. Main takeaway: increasing carbon taxes don’t just cut emissions—they rewrite the rules of the oil market. Production shifts to efficient fields, curbing OPEC’s dominance and paving the way for a more efficient transition. 💡🌍 (4/10).

Meanwhile, #OPEC ⏬slows down⏬production to keep prices high, exercising market power by creating artificial scarcity. This creates a tension:.👉How does OPEC’s behavior interact with climate policy?.👉Can policies tackle emissions and reduce market distortions? (3/10).

To align with the #ParisAgreement’s global warming target, an important portion of world oil reserves needs to remain untapped. The prospect of stricter climate policies can lead oil companies to ⏫speed up ⏫ production today—a phenomenon known as the green paradox. (2/10)

Excited to share our new working paper! Check out this great explainer thread by my coauthor @knittelMIT 👇.

RT @carles_mano_cab: Today we have the 17th Belgian #EnvironmentalEconomics Day (#BEED) at @UAntwerpen. Great presentations!!. @JVanBiesebr….

Grateful for the enriching experience at the BSE Energy research group led by @MarReguant this semester! Wrapping up with lots of stimulating discussions and invaluable feedback. Check out their inspiring research below on the newly launched website !.

RT @LeuvenEconomics: FWO PhD fellowships for @CharlotteDeCan1, Marjolein, Thimo, @DeneusT & @wh_burton!. Today @FWOVlaanderen announced the….