News Story

May 26, 2017
Environment@Harvard

Econometrics and Climate

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Jim Stock’s nearly two decades of work on environmental issues—everything from journal articles on temperature variation to his new freshman seminar on “The U.S. Energy Revolution and its Implications”—began with a chance conversation. 

At an interdisciplinary conference in the mid-1990s, a few researchers who were working with climate data happened to strike up a conversation. “It became clear that many of the technical issues in climate data were very closely related to the technical issues of macroeconomic data,” says Stock, now the Burbank Professor of Political Economy. “And it required using a range of tools which had really been, at that point, pretty well developed in macroeconomics, but hadn’t seen a lot of light outside that test tube.”

Stock’s initial pursuit of economics was similarly unplanned: a few post-undergraduate years with an energy policy consulting firm compelled him to apply to graduate school at the University of California, Berkeley, to study the topic further. Once there, though, his interests shifted to econometrics. “Since I was a physics major [as an undergrad], to a considerable extent I was just a blank slate,” says Stock. “The key feature of econometrics is that you’re using hard information from the world around you to draw inferences about how that world works and then making conclusions that are relevant for policy and people’s everyday lives—and that grounding in empirical evidence really appealed to me.” After earning his masters degree in statistics and his Ph.D. in economics at Berkeley, he began his career at the Harvard Kennedy School in 1983 as an assistant professor of public policy, beginning what has become a 32-year career at Harvard (briefly interrupted by a two-year stint at Berkeley.)

In 2014, Stock took his climate experience to the President’s Council of Economic Advisors—though his initial appointment wasn’t focused on environmental efforts. “There was, at the time, a particular interest in bringing some forecasting expertise to the Council,” he says. “But there was also a great deal of interest in the White House in moving forward in the climate arena.” With strong personal feelings about the issue and relevant previous work, that part of the portfolio fell to him. 

Among the issues that Stock was tasked with investigating on the Council was federal coal policy, a topic he has continued to focus on over the past few years. While he admits that the landscape has shifted under the Trump Administration, with Obama-era reform efforts now shelved, “federal coal policy remains a really important aspect of the climate area that is, I think, underappreciated.” He offers supporting data: coal mined on federal lands, Stock says, accounts for 40% of the coal that we use to generate electricity and burning that coal amounts to 13% of energy-related U.S. greenhouse gas emissions. “The challenge, then, is to think about how we can align our position as the biggest single seller of coal to the U.S. market with our federal climate goals,” he says. And while he notes that the current White House has shown no interest in those climate goals, he doesn’t expect that stance to last beyond this administration. “We want to have a better understanding of how policy can work in this space available to us when we are in a policy-making environment that is not as extreme as the current one.”

— Dan Morrell

This profile originally appeared in Environment@Harvard: Volume 9, Issue 1

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