Confronting the Incentive Problem: Energy, Policy and Markets
The most fundamental driver of our climate and environmental challenges is a market failure. When a factory burns coal or a car burns gasoline, the cost of that combustion — in air pollution, in public health damage, in long-term disruption to the climate — is borne by people who had no say in the decision. Policies and markets should provide an incentive to change that.
That is the fundamental driver for the Energy Policy Institute at the University of Chicago — EPIC. Building off the University of Chicago’s renowned tradition for using economics to tackle major societal challenges, EPIC has brought together world-leading scholars for more than a decade who are uncovering the policies needed to ensure energy markets provide access to reliable, affordable energy needed for growth, while limiting emissions that cause climate change and damages to our health and environment.
EPIC’s field-defining research has identified policy-relevant solutions in the United States and around the world—from laying out how grid expansion boosts renewables and clean energy tax credits lower electricity prices to showing how climate financing holds off migration and encourages adaptation and corporate disclosure rules reduce emissions. The work EPIC has produced is recognized as among the most rigorous in the world, and it has shaped how policymakers, regulators, and researchers think about the relationship between energy, growth, and environmental harm.