OxTalks Change Freeze Starts 2 March
Oxford Events, the new replacement for OxTalks, will launch on 16th March. The two-week OxTalks freeze period starts on Monday 2nd March. During this time, there will be no facility to publish or edit events. The existing OxTalks site will remain available to view during this period. Once Oxford Events launches, you will need a Halo login to submit events. Full details are available on the Staff Gateway.
Bringing Breakthrough Technologies to Market: Evidence from UK Renewable Energy Projects
Due to the irreversibility of many investments, firms often have a “rational reluctance” to invest immediately in risky projects and there is an option value to waiting. However, this delay in investment is sub-optimal if the technologies in question generate large positive externalities or reduce negative externalities. As pandemics and extreme weather events have shown, there is significant social value to early, pre-emptive investments. In this paper, I explore how a policy that reduces the uncertainty of future revenues brings breakthrough clean technologies to market. I develop a dynamic model of firm entry and investment which shows that a social planner prefers risk-reduction policies over Pigouvian subsidies if investment costs increase in price risk. I exploit the presence of bunching around the UK’s renewable energy feed-in-tariff eligibility threshold to estimate the value of risk reduction to firms. The magnitude of excess bunching around the eligibility threshold confirms that firms significantly value risk-reduction, with the policy yielding a positive and significant impact on entry and investment into the renewable energy market. Policies to reduce investor risk may therefore be an important component of helping breakthrough technologies scale-up in a timely manner, which in turn can help avoid acute societal crises.
Date:
3 February 2022, 15:00
Venue:
Virtual Seminar via Zoom (please register to attend)
Speaker:
Sugandha Srivastav (Complexity/Sustainability Programmes, INET Oxford)
Organising department:
Institute for New Economic Thinking
Organiser:
Susan Mousley (INET Oxford Admin Team)
Organiser contact email address:
events@inet.ox.ac.uk
Part of:
INET Oxford Researcher Seminars
Booking required?:
Required
Booking url:
https://us02web.zoom.us/meeting/register/tZwtf--tpj8tGdFivYUrIUEDIsM1e9BE3GSG
Audience:
Public
Editor:
Susan Mousley
