Research

The global transition to clean energy carries significant implications for countries with large resource extraction sectors. I evaluate the welfare impact of falling global demand for fossil fuels and an expanding clean energy sector in small, resource-rich economies. I develop a quantitative model of a two-region, multisector, small open economy with heterogeneous households featuring both fossil and clean production. Calibrating the model to Canadian data, I find that the transition to a Net Zero world by 2050 reduces welfare by 0.73\% among young, low-income households living in the fossil extracting region of the economy. The magnitude of these losses decrease with age and with income. In order for the transition to be welfare enhancing for the economy, the annualized growth rate in non-energy productivity needs to increase by 1 percentage point above the current trend.

We study the behaviour of Canadian Total Factor Productivity (TFP) growth over the past 60 years. We find that the observed stagnation during the last 20 years is entirely accounted for by the Oil sector. Higher oil prices made capital-intensive sources of oil like the oil sands viable to extract on a commercial scale. However, the greater input required per barrel of oil slowed TFP growth. Comparing Canadian TFP growth to those of the United States and Norway reinforces these results. However, our result should not be interpreted to carry any welfare implications.

Preliminary: How does product concentration affect welfare gains from trade? While traditional quantitative trade models can account for export concentration, they are unable to adequately match import concentration, particularly the fact that richer countries import a greater variety of goods. In this paper we enrich a multi-country Ricardian model of international trade to match both import and export concentration. Our model is also able to account for changes in the Least Traded Products margin (as defined in Kehoe and Ruhl, 2013) after a trade liberalization.

Preliminary: How do producers of clean technology inputs differ from other firms? How responsive is the "Green Industry" to environmental policy? Using novel firm-level data from Canada, I identify producers of Environmental and Clean Technology Products (ECTP) and study their composition and dynamics over time. Using these insights, I develop a model of heterogeneous firms (as in Hopenhayn, 1992) to assess the efficacy of policies aimed at growing the industry.