Derek Lemoine

Projecting Market Impacts of Climate Change (with Sarah Kapnick, available upon request)
Playing the Climate Dominoes: Tipping Points and the Cost of Delaying Policy (with Christian Traeger, available upon request)

Work in progress: Pricing climate assets, Energy transitions

Teaching:  
Econ 696V: Environmental and Energy Economics: Applied Theory (graduate)

Econ 150: Energy and Environmental Challenges (undergraduate)

Interests: Environmental and energy economics, Time and uncertainty, Complex systems

 
Primary Peer-Reviewed Publications

Watch Your Step: Optimal Policy in a Tipping Climate
Lemoine, D. and C. Traeger
.  2014.  American Economic Journal: Economic Policy 6(1):137-166. doi:10.1257/pol.6.1.137
NBER working paper version (Tipping Points and Ambiguity in the Economics of Climate Change)


Optimal carbon price under a feedback tipping point
We investigate the optimal policy response to the possibility of abrupt, irreversible shifts in system dynamics. The welfare cost of a tipping point emerges from the policymaker's response to altered system dynamics. Our policymaker also learns about a threshold's location by observing the system's response in each period. Simulations with a recursive, numerical climate-economy model show that tipping possibilities raise the optimal carbon tax more strongly over time. The resulting policy paths ultimately lower optimal peak warming by up to 0.5 degrees C. Different types of post-tipping shifts in dynamics generate qualitatively different optimal pre-tipping policy paths.
        PAGES newsletter perspective on abrupt change (Feb 2012)


The Economics of Solar Electricity
Baker, E., M. Fowlie, D. Lemoine, and S.S. Reynolds. 
2013Annual Review of Resource Economics 5(1):387-426.  doi:10.1146/annurev-resource-091912-151843
Link for complimentary one-time access
Working paper version (EI@Haas)

The benefits and costs of increasing solar electricity generation depend on the scale of the increase and on the timeframe over which it occurs. Short-run analyses focus on the cost-effectiveness of incremental increases in solar capacity, holding the rest of the power system fixed. Solar's variability adds value if its power occurs at high-demand times and displaces relatively carbon-intensive generation. Medium-run analyses consider the implications of non-incremental changes in solar capacity. The cost of each installation may fall through experience effects, but the cost of grid integration increases when solar requires ancillary services and fails to displace investment in other types of generation. Long-run analyses consider the role of solar in reaching twenty-first century carbon targets. Solar's contribution depends on the representation of grid integration costs, on the availability of other low-carbon technologies, and on the potential for technological advances. By surveying analyses for different time horizons, this paper begins to connect and integrate a fairly disjointed literature on the economics of solar energy.


Trapped Between Two Tails: Trading Off Scientific Uncertainties via Climate Targets
Lemoine, D. and H.C. McJeon
2013Environmental Research Letters 8:034019. doi:
10.1088/1748-9326/8/3/034019

Breakeven damages, from Lemoine and McJeon (2013)
Climate change policies must trade off uncertainties about future warming, about the social and ecological impacts of warming, and about the cost of reducing greenhouse gas emissions. We show that laxer carbon targets produce broader distributions for climate damages, skewed towards severe outcomes. However, if potential low-carbon technologies fill overlapping niches, then more stringent carbon targets produce broader distributions for the cost of reducing emissions, skewed towards high-cost outcomes. We use the technology-rich GCAM integrated assessment model to assess the robustness of 450 ppm and 500 ppm carbon targets to each uncertain factor. The 500 ppm target provides net benefits across a broad range of futures. The 450 ppm target provides net benefits only when impacts are greater than conventionally assumed, when multiple technological breakthroughs lower the cost of abatement, or when evaluated with a low discount rate. Policy evaluations are more sensitive to uncertainty about abatement technology and impacts than to uncertainty about warming.





Climate sensitivity distributions depend on the possibility that models share biases
Lemoine, D.M.  2010.  Journal of Climate 23(16):4395-4415. doi:10.1175/2010JCLI3503.1


Uncertainty about biases common across models and about unknown and unmodeled feedbacks is important for the
tails of temperature change distributions and thus for climate risk assessments.  This paper develops a hierarchical Bayes framework that explicitly represents these and other sources of uncertainty.  It then uses models' estimates of albedo, carbon cycle, cloud, and water vapor-lapse rate feedbacks to generate posterior probability distributions for feedback strength and equilibrium temperature change.  The posterior distributions are especially sensitive to prior beliefs about models' shared structural biases: nonzero probability of shared bias moves some probability mass towards lower values for climate sensitivity even as it thickens the distribution's positive tail.  Obtaining additional models of these feedbacks would not constrain the posterior distributions as much as would narrowing prior beliefs about shared biases or, potentially, obtaining feedback estimates having biases uncorrelated with those impacting climate models.  Carbon dioxide concentrations may need to fall below current levels in order to maintain only a 10% chance of exceeding official 2 degrees Celsius limits on global average temperature change.
© Copyright 2010 AMS



Paleoclimatic warming increased carbon dioxide concentrations
Lemoine,
D.M.  2010.  Journal of Geophysical Research 115:D22122.  doi:10.1029/2010JD014725

Climate-carbon feedback strength
If climate-carbon feedbacks are positive, then warming causes changes in carbon dioxide (CO2) sources and sinks that increase CO2 concentrations and create further warming. Previous work using paleoclimatic reconstructions has not disentangled the causal effect of interest from the effects of reverse causality and autocorrelation. The response of CO2 to variations in orbital forcing over the past 800,000 years suggests that millennial-scale climate-carbon feedbacks are significantly positive and significantly greater than century-scale feedbacks. Feedbacks are also significantly greater on 100 year timescales than on 50 year timescales over the past 1,500 years. Posterior probability distributions implied by coupled models' predictions and by these paleoclimatic results give a mean of 0.03 for the non-dimensional climate-carbon feedback factor and a 90% chance of its being between -0.04 and 0.09. The 70% chance that climate-carbon feedbacks are positive implies that temperature change projections tend to underestimate an emission path's consequences if they do not allow the carbon cycle to respond to changing temperatures.


The climate impacts of bioenergy systems depend on market and regulatory policy contexts
Lemoine,
D.M., R.J. Plevin, A.S. Cohn, A.D. Jones, A.R. Brandt, S.E. Vergara, and D.M. Kammen.  2010.  Environmental Science & Technology 44(19):7347-7350.  doi:10.1021/es100418p

Biofuels emissions depend on displacement assumptions
Biomass can help reduce greenhouse gas (GHG) emissions by displacing petroleum in the transportation sector, by displacing fossil-based electricity, and by sequestering atmospheric carbon. Which use mitigates the most emissions depends on market and regulatory contexts outside the scope of attributional life cycle assessments. We show that bioelectricity's advantage over liquid biofuels depends on the GHG intensity of the electricity displaced. Bioelectricity that displaces coal-fired electricity could reduce GHG emissions, but bioelectricity that displaces wind electricity could increase GHG emissions. The electricity displaced depends upon existing infrastructure and policies affecting the electric grid. These findings demonstrate how model assumptions about whether the vehicle fleet and bioenergy use are fixed or free parameters constrain the policy questions an analysis can inform. Our bioenergy life cycle assessment can inform questions about a bioenergy mandate's optimal allocation between liquid fuels and electricity generation, but questions about the optimal level of bioenergy use require analyses with different assumptions about fixed and free parameters.
Energy Displacement Model (Excel spreadsheet)



Valuing plug-in hybrid electric vehicles' battery capacity using a real options framework
Lemoine,
D.M.  2010.  The Energy Journal 31(2):113-143.

Contribution to vehicle value from recognizing fuel flexibility
Plug-in hybrid electric vehicles (PHEVs) enable their drivers to choose whether to use electricity or gasoline, but this fuel flexibility benefit requires the purchase of additional battery capacity relative to most other vehicles. We value the fuel flexibility of PHEVs by representing the purchase of the battery as the purchase of a strip of call options on the price of transportation. We use a Kalman filter to obtain maximum likelihood estimates for three gasoline price models applied to a U.S. municipal market. We find that using a real options approach instead of a discounted cash flow analysis does not raise the retail price at which the battery pays for itself by more than $50/kWh (or by more than 15%). A discounted cash flow approach often provides a good approximation for PHEV value in our application, but real options approaches to valuing PHEVs' battery capacity or role in climate policy may be crucial for other analyses.
This article copyrighted and reprinted by permission from the International Association for Energy Economics.  The article first appeared in The Energy Journal (Vol. 31, No. 2).  Visit The Energy Journal online at http://www.iaee.org/en/publications/journal.aspx



An innovation and policy agenda for commercially competitive plug-in hybrid electric vehicles
Lemoine, D.M., D.M. Kammen, and A.E. Farrell.  2008.  Environmental Research Letters 3(1):014003.  doi:10.1088/1748-9326/3/1/014003


Twice-per-day vehicle charging
Optimal vehicle charging
Plug-in hybrid electric vehicles (PHEVs) can use both grid-supplied electricity and liquid fuels. We show that under recent conditions, millions of PHEVs could have charged economically in California during both peak and off-peak hours even with modest gasoline prices and real-time electricity pricing. Special electricity rate tariffs already in place for electric vehicles could successfully render on-peak charging uneconomical and off-peak charging very attractive. However, unless battery prices fall by at least a factor of two, or gasoline prices double, the present value of fuel savings is smaller than the marginal vehicle costs, likely slowing PHEV market penetration in California. We also find that assumptions about how PHEVs are charged strongly influence the number of PHEVs that can be charged before the electric power system must be expanded. If most PHEVs are charged after the workday, and thus after the time of peak electricity demand, our forecasts suggest that several million PHEVs could be deployed in California without requiring new generation capacity, and we also find that the state's PHEV fleet is unlikely to reach into the millions within the current electricity sector planning cycle. To ensure desirable outcomes, appropriate technologies and incentives for PHEV charging will be needed if PHEV adoption becomes mainstream.





Other Peer-Reviewed Publications

The influence of negative emission technologies and technology policies on the optimal climate mitigation portfolio
Lemoine, D.M., S. Fuss, J. Szolgayova, M. Obersteiner, and D.M. Kammen
.  2012.  Climatic Change 113(2):141-162.  doi:10.1007/s10584-011-0269-4
Working paper version (free)


Reduce growth rate of light-duty vehicle travel to meet 2050 global climate goals
Sager, J., J.S. Apte, D.M. Lemoine, and D.M. Kammen.  2011.  Environmental Research Letters 6(2):024018.  doi:10.1088/1748-9326/6/2/024018



Addendum to "An innovation and policy agenda for commercially competitive plug-in hybrid electric vehicles"
Lemoine, D.M. and D.M. Kammen.  2009.  Environmental Research Letters
4(3):039701.  doi:10.1088/1748-9326/4/3/039701


Cost-effectiveness of greenhouse gas emission reductions from plug-in hybrid electric vehicles
Kammen, D.M., S.M. Arons, D.M. Lemoine, and H. Hummel.  2009.  In Plug-in Electric Vehicles: What role for Washington?, ed. D.B. Sandalow, 170-191.  Washington, D.C.: Brookings Institution Press.


A landscape-level GIS analysis of streamside management zones on the Cumberland Plateau
Lemoine, D., J.P. Evans, and C.K. Smith.  2006.  Journal of Forestry 104(3):25-31.




Bio

Today’s environmental challenges emerge from the interaction between complex social and natural systems.  These complex interactions mean that uncertainty about costs and benefits is an inevitably crucial part of policy problems.  Derek Lemoine’s research incorporates scientific and economic uncertainty into tractable modeling frameworks.  For instance, while we understand that the correct price for greenhouse gas emissions is not zero, the integrated assessment models used to estimate this price have assumed that the climate system evolves smoothly and predictably.  Yet we think that the possibility of abrupt changes could be a major part of these emissions' cost.  One of Derek's papers therefore builds possible climate tipping points into a benchmark climate-economy model in order to understand how different types of tipping points affect the optimal carbon price.

At the University of Arizona, Derek works on several projects at the intersection of uncertainty, dynamics, and climate change.  For instance, he has used economic theory to better understand how to set emission ratings in existing biofuel policies.  He has also considered how more stringent climate policies trade off uncertainty about damages from climate change for uncertainty about the cost of reducing emissions.  In addition to his work in economics, he has published in top journals in geoscience, forestry, and environmental science.  These papers’ topics include statistical analyses of ice core records, methods for learning about actual climate change from global climate models’ simulations, and the energy implications of plug-in hybrid electric vehicles. 

Guided by the philosophy that research questions should drive methods, Derek obtained his Ph.D. in 2011 from the interdisciplinary Energy and Resources Group at the University of California, Berkeley.  By working in multiple departments, he also obtained a concurrent Master’s in Economics from UC Berkeley and key advising from Agricultural and Resource Economics.  His undergraduate degree was in Philosophy and in Integrative Environmental Solutions, from the University of the South in Sewanee, TN.  He teaches a graduate class on applied theory approaches to environmental economics.  He also teaches a freshman class that introduces core economic concepts through energy and environmental applications.