You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
Daron Acemoglu and William Nordhaus have some disagreements.

This year’s Economics Nobel is not a climate prize — that happened in 2018, when Yale economist William Nordhaus won the prize for his work on modeling the effects of climate change and economic growth together, providing the intellectual basis for carbon taxation and more generally for regulating greenhouse gas emissions because of the “social cost” they impose on everyone.
Instead, this year’s prize, awarded to MIT’s Daron Acemoglu and Simon Johnson and University of Chicago’s James Robinson is for their work demonstrating “the importance of societal institutions for a country’s prosperity,” i.e. why some countries are rich and others are poor. To do so, the trio looked at the history of those countries’ institutions — laws, modes of government, relationship between the state and individuals — and drew out which are conducive to wealth and which lead to poverty.
Long story short, “extractive” institutions set up to reward a narrow elite tend to hurt economic development over time, as in much of Africa, which was colonized by Europeans who didn’t actually live there. “Inclusive” institutions, by contrast, arose in the United States and Canada, where there was significantly more European migration, thus incentivizing the ruling elite to set up institutions that benefitted a broader range of (again, European) residents.
While this research rests heavily on the climate (the reason Europeans avoided African colonies was because of the high rate of disease in tropical climates), it does not touch on climate change specifically. But Acemoglu especially is an incredibly wide-ranging scholar and has devoted some time to the specific questions of climate change — and in so doing has been a direct critic of Nordhaus, Stockholm’s preferred climate economist.
“Existing approaches in economics still do not provide the right framework for managing the problems that will confront us over the next several decades,” Acemoglu wrote in a 2021 essay titled “What Climate Change Requires of Economics,” referring directly to Nordhaus’s Nobel-winning work. “Although the economics discipline has evolved over time to acknowledge environmental risks and costs, it has yet to rise to the challenge of climate change. A problem as massive as this one will require a fundamental reconsideration of some of the field's most deeply held assumptions.”
His criticisms included that Nordhaus’s more gradualistic approach — the latest version of his model spits out that a 1.5 degree Celsius warming target is “infeasible,” and the “cost vs. benefit optimal” amount of warming as 2.6 degrees Celsius over pre-industrial levels with a carbon price that rises to $115 per ton by 2050 — ignores both the best way to reduce emissions and the risk of not doing so fast enough.
Acemoglu is far more optimistic about how policy can direct technological development and less sanguine about additional warming over and above the Paris Agreement limits. He argues that the possibility of theoretical “tipping points,” where exceeding certain climate thresholds by even a small amount may cause dramatic damages, make the risk of such overshoot far too great.
He also took issue with the discount rate applied to spending later vs. spending now in Nordhaus’s models. The basic idea is that a dollar spent today to mitigate the effects of climate change is more valuable than one spent in 2050. But the rates Nordhaus uses — which he derives from real-world investment returns — implies that in order for spending now to be worth it later, the benefits in 2050 or 2100 must be very, very large.
“There is a plausible economic (and philosophical) case to be made for why future essential public goods should be valued differently than private goods or other types of public consumption,” Acemoglu wrote in 2021, arguing that discount rates derived from investment returns, like the ones Nordhaus uses, might not be the best guide to public policy.
So what does the latest Nobel laureate want instead? Well, something like what the United States has been doing the past few years.
Accounting for the economic benefits of domestic or “endogenous” technological development, Acemoglu’s research finds that "the transition to cleaner energy is much more important than simply reducing energy consumption, and that technological interventions need to be redirected far more aggressively than they have been.” He explored how this process could work in papers he wrote over more than a decade, developing a model for this kind of directed technological change and applying it to the United States, starting as far back as 2012.
Across all his work on climate change, Acemoglu argues that a focus on pricing the “externalities” of carbon emissions — the harm emissions impose on everyone that isn’t reflected in the prices of fossil fuels — is myopic. Instead, the challenge is both restricting emissions and fostering clean technologies that can take the place of dirty ones, which have had a remarkable head start in investment.
In “The Environment and Directed Technical Change,” published in 2012 and co-written with Philippe Aghion, Leonardo Bursztyn, and David Hemous, Acemoglu argues that a mixture of carbon taxes and research subsides could “redirect technical change and avoid an environmental disaster” by imposing a cost on dirty technology and boosting clean technology.
Such an approach would probably rest heavily on positive subsidies and encouraging clean technology and less on a carbon tax, the four write (although a carbon tax would still help to “discourage research” into polluting technologies). It would also need to happen soon.
“Directed technical change also calls for immediate and decisive action in contrast to the implications of several exogenous technology models used in previous economic analyses.”
This framework does not precisely match United States policy — we have no carbon tax — but it does somewhat approximate it. The Biden administration’s approach to climate policy centers on large-scale investments in clean technologies, whether they’re tax credits for non-carbon-emitting electricity production or financing for clean energy projects from the Loan Programs Office, combined with a suite of Environmental Protection Agency rules that are intended to reduce pollution from fossil fuel power plants (along with an actual direct fee on methane emissions).
This approach is embedded within an overall industrial policy that’s supposed to make the economy more productive — a counter-argument to the idea that climate spending is an economic drag that trades off with environmental harms in the future. Acemoglu, too, questions the idea that there’s a tradeoff between economic growth and spending to combat climate change. Not only could renewables be cheaper than fossil fuels, “an energy transition can improve productive capacity and thus lead to an expansion of output, because transition to cleaner technologies can boost investment and the rate of technological progress,” he and his co-authors write.
Acemoglu has also weighed in on one the more controversial questions in climate policy and economics: the shale gas boom. In a 2023 paper written, again with Aghion, Hemous, and Lint Barrage, he weighed the effects of dramatic increase of domestically extracted natural gas, focusing on the importance of technological development. The Environmental Protection Agency attributes the decline in US greenhouse gas emissions since 2010 in part to “the growing use of natural gas and renewables to generate electricity in place of more carbon-intensive fuels,” due to natural gas replacing coal electricity generation. While this logic has come under fire from some activists and researchers who say the government’s models underestimate methane leakage from natural gas operations, Acemoglu took a different tack.
Yes, natural gas substituting for coal reduces short-run emissions, he and his co-authors concluded, but also, “the natural gas boom discourages innovation directed at clean energy, which delays and can even permanently prevent the energy transition to zero carbon.” They backed up this assertion by pointing to a decline in the total share of patents rewarded to renewable energy innovation between 2009 and 2016.
The way out is that same mix of carbon prices and technology subsidies Acemoglu has been recommending in some form since Kelly Clarkson was last on top of the charts, which “enables emission reductions in the short run, while optimal policy would ensure that the long-run green transition is not disrupted.”
If the Biden Administration’s climate policy works out, it will look something like that, and the prize will be far greater than anything given out in Stockholm.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
There has been no new nuclear construction in the U.S. since Vogtle, but the workers are still plenty busy.
The Trump administration wants to have 10 new large nuclear reactors under construction by 2030 — an ambitious goal under any circumstances. It looks downright zany, though, when you consider that the workforce that should be driving steel into the ground, pouring concrete, and laying down wires for nuclear plants is instead building and linking up data centers.
This isn’t how it was supposed to be. Thousands of people, from construction laborers to pipefitters to electricians, worked on the two new reactors at the Plant Vogtle in Georgia, which were intended to be the start of a sequence of projects, erecting new Westinghouse AP1000 reactors across Georgia and South Carolina. Instead, years of delays and cost overruns resulted in two long-delayed reactors 35 miles southeast of Augusta, Georgia — and nothing else.
“We had challenges as we were building a new supply chain for a new technology and then workforce,” John Williams, an executive at Southern Nuclear Operating Company, which owns over 45% of Plant Vogtle, said in a webinar hosted by the environmental group Resources for the Future in October.
“It had been 30 years since we had built a new nuclear plant from scratch in the United States. Our workforce didn’t have that muscle memory that they have in other parts of the world, where they have been building on a more regular frequency.”
That workforce “hasn’t been building nuclear plants” since heavy construction stopped at Vogtle in 2023, he noted — but they have been busy “building data centers and car manufacturing in Georgia.”
Williams said that it would take another “six to 10” AP1000 projects for costs to come down far enough to make nuclear construction routine. “If we were currently building the next AP1000s, we would be farther down that road,” he said. “But we’ve stopped again.”
J.R. Richardson, business manager and financial secretary of the International Brotherhood of Electric Workers Local 1579, based in Augusta, Georgia, told me his union “had 2,000 electricians on that job,” referring to Vogtle. “So now we have a skill set with electricians that did that project. If you wait 20 or 30 years, that skill set is not going to be there anymore.”
Richardson pointed to the potential revitalization of the failed V.C. Summer nuclear project in South Carolina, saying that his union had already been reached out to about it starting up again. Until then, he said, he had 350 electricians working on a Meta data center project between Augusta and Atlanta.
“They’re all basically the same,” he told me of the data center projects. “They’re like cookie cutter homes, but it’s on a bigger scale.”
To be clear, though the segue from nuclear construction to data center construction may hold back the nuclear industry, it has been great for workers, especially unionized electrical and construction workers.
“If an IBEW electrician says they're going hungry, something’s wrong with them,” Richardson said.
Meta’s Northwest Louisiana data center project will require 700 or 800 electricians sitewide, Richardson told me. He estimated that of the IBEW’s 875,000 members, about a tenth were working on data centers, and about 30% of his local were on a single data center job.
When I asked him whether that workforce could be reassembled for future nuclear plants, he said that the “majority” of the workforce likes working on nuclear projects, even if they’re currently doing data center work. “A lot of IBEW electricians look at the longevity of the job,” Richardson told me — and nuclear plants famously take a long, long time to build.
America isn’t building any new nuclear power plants right now (though it will soon if Rick Perry gets his way), but the question of how to balance a workforce between energy construction and data center projects is a pressing one across the country.
It’s not just nuclear developers that have to think about data centers when it comes to recruiting workers — it’s renewables developers, as well.
“We don’t see people leaving the workforce,” said Adam Sokolski, director of regulatory and economic affairs at EDF Renewables North America. “We do see some competition.”
He pointed specifically to Ohio, where he said, “You have a strong concentration of solar happening at the same time as a strong concentration of data center work and manufacturing expansion. There’s something in the water there.”
Sokolski told me that for EDF’s renewable projects, in order to secure workers, he and the company have to “communicate real early where we know we’re going to do a project and start talking to labor in those areas. We’re trying to give them a market signal as a way to say, We’re going to be here in two years.”
Solar and data center projects have lots of overlapping personnel needs, Sokolski said. There are operating engineers “working excavators and bulldozers and graders” or pounding posts into place. And then, of course, there are electricians, who Sokolski said were “a big, big piece of the puzzle — everything from picking up the solar panel off from the pallet to installing it on the racking system, wiring it together to the substations, the inverters to the communication systems, ultimately up to the high voltage step-up transformers and onto the grid.”
On the other hand, explained Kevin Pranis, marketing manager of the Great Lakes regional organizing committee of the Laborers’ International Union of North America, a data center is like a “fancy, very nice warehouse.” This means that when a data center project starts up, “you basically have pretty much all building trades” working on it. “You’ve got site and civil work, and you’re doing a big concrete foundation, and then you’re erecting iron and putting a building around it.”
Data centers also have more mechanical systems than the average building, “so you have more electricians and more plumbers and pipefitters” on site, as well.
Individual projects may face competition for workers, but Pranis framed the larger issue differently: Renewable energy projects are often built to support data centers. “If we get a data center, that means we probably also get a wind or solar project, and batteries,” he said.
While the data center boom is putting upward pressure on labor demand, Pranis told me that in some parts of the country, like the Upper Midwest, it’s helping to compensate for a slump in commercial real estate, which is one of the bread and butter industries for his construction union.
Data centers, Pranis said, aren’t the best projects for his members to work on. They really like doing manufacturing work. But, he added, it’s “a nice large load and it’s a nice big building, and there’s some number of good jobs.”
A conversation with Dustin Mulvaney of San Jose State University
This week’s conversation is a follow up with Dustin Mulvaney, a professor of environmental studies at San Jose State University. As you may recall we spoke with Mulvaney in the immediate aftermath of the Moss Landing battery fire disaster, which occurred near his university’s campus. Mulvaney told us the blaze created a true-blue PR crisis for the energy storage industry in California and predicted it would cause a wave of local moratoria on development. Eight months after our conversation, it’s clear as day how right he was. So I wanted to check back in with him to see how the state’s development landscape looks now and what the future may hold with the Moss Landing dust settled.
Help my readers get a state of play – where are we now in terms of the post-Moss Landing resistance landscape?
A couple things are going on. Monterey Bay is surrounded by Monterey County and Santa Cruz County and both are considering ordinances around battery storage. That’s different than a ban – important. You can have an ordinance that helps facilitate storage. Some people here are very focused on climate change issues and the grid, because here in Santa Cruz County we’re at a terminal point where there really is no renewable energy, so we have to have battery storage. And like, in Santa Cruz County the ordinance would be for unincorporated areas – I’m not sure how materially that would impact things. There’s one storage project in Watsonville near Moss Landing, and the ordinance wouldn’t even impact that. Even in Monterey County, the idea is to issue a moratorium and again, that’s in unincorporated areas, too.
It’s important to say how important battery storage is going to be for the coastal areas. That’s where you see the opposition, but all of our renewables are trapped in southern California and we have a bottleneck that moves power up and down the state. If California doesn’t get offshore wind or wind from Wyoming into the northern part of the state, we’re relying on batteries to get that part of the grid decarbonized.
In the areas of California where batteries are being opposed, who is supporting them and fighting against the protests? I mean, aside from the developers and an occasional climate activist.
The state has been strongly supporting the industry. Lawmakers in the state have been really behind energy storage and keeping things headed in that direction of more deployment. Other than that, I think you’re right to point out there’s not local advocates saying, “We need more battery storage.” It tends to come from Sacramento. I’m not sure you’d see local folks in energy siting usually, but I think it’s also because we are still actually deploying battery storage in some areas of the state. If we were having even more trouble, maybe we’d have more advocacy for development in response.
Has the Moss Landing incident impacted renewable energy development in California? I’ve seen some references to fears about that incident crop up in fights over solar in Imperial County, for example, which I know has been coveted for development.
Everywhere there’s batteries, people are pointing at Moss Landing and asking how people will deal with fires. I don’t know how powerful the arguments are in California, but I see it in almost every single renewable project that has a battery.
Okay, then what do you think the next phase of this is? Are we just going to be trapped in a battery fire fear cycle, or do you think this backlash will evolve?
We’re starting to see it play out here with the state opt-in process where developers can seek state approval to build without local approval. As this situation after Moss Landing has played out, more battery developers have wound up in the opt-in process. So what we’ll see is more battery developers try to get permission from the state as opposed to local officials.
There are some trade-offs with that. But there are benefits in having more resources to help make the decisions. The state will have more expertise in emergency response, for example, whereas every local jurisdiction has to educate themselves. But no matter what I think they’ll be pursuing the opt-in process – there’s nothing local governments can really do to stop them with that.
Part of what we’re seeing though is, you have to have a community benefit agreement in place for the project to advance under the California Environmental Quality Act. The state has been pretty strict about that, and that’s the one thing local folks could still do – influence whether a developer can get a community benefits agreement with representatives on the ground. That’s the one strategy local folks who want to push back on a battery could use, block those agreements. Other than that, I think some counties here in California may not have much resistance. They need the revenue and see these as economic opportunities.
I can’t help but hear optimism in your tone of voice here. It seems like in spite of the disaster, development is still moving forward. Do you think California is doing a better or worse job than other states at deploying battery storage and handling the trade offs?
Oh, better. I think the opt-in process looks like a nice balance between taking local authority away over things and the better decision-making that can be brought in. The state creating that program is one way to help encourage renewables and avoid a backlash, honestly, while staying on track with its decarbonization goals.
The week’s most important fights around renewable energy.
1. Nantucket, Massachusetts – A federal court for the first time has granted the Trump administration legal permission to rescind permits given to renewable energy projects.
2. Harvey County, Kansas – The sleeper election result of 2025 happened in the town of Halstead, Kansas, where voters backed a moratorium on battery storage.
3. Cheboygan County, Michigan – A group of landowners is waging a new legal challenge against Michigan’s permitting primacy law, which gives renewables developers a shot at circumventing local restrictions.
4. Klamath County, Oregon – It’s not all bad news today, as this rural Oregon county blessed a very large solar project with permits.
5. Muscatine County, Iowa – To quote DJ Khaled, another one: This county is also advancing a solar farm, eliding a handful of upset neighbors.