Prof. Severin Borenstein of the Haas School of Business, University of California, Berkeley. Abstract: As US energy challenges mount, the public and political debate continues to demonstrate disturbing misunderstandings of both the problems and potential solutions. The US faces three distinct energy challenges: maintaining moderate energy costs in order to benefit the economy, controlling greenhouse gases and other environmental damage from energy use, and reducing the geopolitical consequences of dependence on crude oil. Though some policies help to address all three challenges, often tackling one of these problems exacerbates the others. Borenstein will discuss the logic and fallacies behind government energy policies, from taxes (implicit or explicit) on greenhouse gas emissions, to tax incentives for domestic oil exploration, to support for energy efficiency improvements or basic energy science research. The energy challenges that the US faces are serious, but by adhering to a few basic economic principles, the cost of meeting these challenges can be kept manageable.

About the Speaker: Severin Borenstein is E.T. Grether Professor of Business Administration and Public Policy at the Haas School of Business and Director of the University of California Energy Institute, where he is also co-Director of the Institute's Center for the Study of Energy Markets. He received his A.B. from U.C. Berkeley in 1978 and Ph.D. in Economics from M.I.T. in 1983. His research focuses on business competition, strategy, and regulation. He has published extensively on the airline industry, the oil and gasoline industries, and electricity markets. His current research projects include empirical and theoretical work on competition in gasoline markets; market power and pricing issues in restructured electricity markets; strategic pricing and financial distress in the airline industry; and the incentives of firms to cut costs and improve efficiency.