The Program on Energy and Sustainable Development (PESD) is an international, interdisciplinary program that draws on the fields of economics, political science, law, and management to investigate how the production and consumption of energy affect human welfare and environmental quality. In addition to undertaking world-class research, the Program leads advanced graduate and introductory undergraduate courses and seminars in energy and environmental policy at Stanford. The Program's core sponsors are BP, plc, and the Electric Power Research Institute (EPRI).
PESD's current research concentrates on the following areas:
- Climate Policy Instruments in an Imperfect World: Policy tools to reduce greenhouse gas emissions under the Kyoto Protocol include a cap-and-trade system in Europe and an international offset market allowing parties bound by carbon limits to buy emissions allowances from developing country projects. PESD research on climate policy focuses on how the actual operation of such instruments deviates significantly from idealized economic models. It also suggests new strategies to engage developing countries in climate change mitigation by leveraging rather than fighting their inherent national interests;
- National Oil Companies (NOCs) in the World Oil Market: Roughly 80% of world reserves of oil and natural gas are controlled by state-owned oil companies, and yet the functioning of these diverse entities is poorly understood. Based on field research on 15 of the world's most important NOCs, PESD is completing a major study of how the relationship between government and NOC critically shapes company performance and strategy;
- The Emerging Global Coal Market: Coal is the fastest growing fossil fuel globally over the past five years, despite its environmental shortcomings. PESD is interested in identifying the drivers of this growth, and, in an era of potential carbon constraints in many markets, whether we should expect it to continue;
- Business Models for Carbon Capture and Storage (CCS): Widespread implementation of CCS could help resolve the climate dilemmas posed by coal. However, there are very few CCS projects in existence and none involving large-scale power supply. PESD is studying how radical energy technologies like CCS typically diffuse into the marketplace, and what kinds of regulatory support can facilitate large-scale adoption;
- Low Income Energy Services: PESD's research focuses on how to provide energy in a financially and politically sustainable way to poor populations in developing countries. Current work considers business models for dissemination of improved biomass-burning stoves, which have major health and climate benefits and yet have historically failed to be adopted. In the process, the cookstove research addresses broader questions about the real drivers of technology adoption by the poor; and
- Renewable Energy and the Smart Grid: PESD, along with researchers in the Precourt Institute for Energy, is tackling the key question of how to reshape the technology, operation, and regulation of wholesale electricity markets to facilitate integration of low-carbon energy technologies like wind, solar, nuclear, and CCS. Realizing the full potential of such technologies depends on policy and regulatory changes to help expand transmission infrastructure, put in place dynamic pricing, and support needed investment in new generation to meet a growing electricity demand.