About

James M. Sallee is an economist specializing in energy, climate, policy, taxes, and the environment. He is a professor at the University of California, Berkeley, where he teaches and conducts research. Sallee is affiliated with the Energy Institute at Haas and is part of the leadership team for the Master of Climate Solutions program, an interdisciplinary professional degree focused on fostering solutions to the climate crisis. Additionally, he contributes to decarbonization efforts at Amazon. His work and research are aimed at addressing critical issues related to the environment and climate change, with a focus on developing effective policies and solutions for a better planet.

Research topics

• Political Science
• Business
• Microeconomics
• Engineering
• Public economics
• Market economy
• Economics
• Environmental economics
• Natural resource economics

Selected publications

• The Trouble with Green Subsidies

  National Tax Journal · 2025-01-23 · 3 citations

  article1st authorCorresponding

  This paper explores the efficiency consequences of pursuing pollution reduction through reliance on green subsidies rather than pollution taxes. It presents a stylized model of “subsidy-first” policy in which subsidies are rationalized by missing or incomplete taxes on some goods. It delineates five sources of inefficiency in subsidies, several of which relate to information requirements. In the model, green subsidies are justified because they induce substitution away from dirtier alternatives. Thus, subsidies hinge on counterfactuals, which creates information challenges analogous to the additionality problem. Insights from the model are used to comment on the Inflation Reduction Act.

  PublisherDOI

• The Efficiency of Dynamic Electricity Prices

  SSRN Electronic Journal · 2024-01-01

  articleOpen access
  PublisherDOI

• The Efficiency of Dynamic Electricity Prices

  SSRN Electronic Journal · 2024-01-01 · 2 citations

  articleOpen access
  PublisherDOI

• The Efficiency of Dynamic Electricity Prices

  National Bureau of Economic Research · 2024-09-01 · 3 citations

  reportOpen access

  The marginal cost of electricity fluctuates hour-by-hour, yet retail customers typically face flat prices.Using data from all seven US wholesale markets and a new method to evaluate alternative rates set in advance that accounts for equilibrium price effects, we estimate efficiency gains from time-varying price schedules that better align price with cost.We have three main results.First, time-of-use rates and critical-peak pricing, the two most common time-varying rate plans, each correct about 10% of mispricing.Second, complex rate structures based on historical prices often backfire.Third, real-time pricing with price ceilings can capture most potential efficiency gains while limiting customer risk.

  PublisherDOI

• Retiring Old Capital to Foster Decarbonization

  Entrepreneurship and Innovation Policy and the Economy · 2024-01-01 · 6 citations

  article1st authorCorresponding

  A majority of anthropogenic greenhouse gas emissions come from fossil fuel combustion. Combustion nearly always involves some form of durable capital, which includes vehicles, appliances, and power generators. Many policies aim to improve environmental outcomes by regulating the efficiency or emissions of this capital. Most such policies focus on new capital. This paper discusses the importance of policies that target used capital as a complement to such regulations. In particular, the paper argues that used capital policies that are designed to accelerate retirement of used capital, by either taxing its use or subsidizing its scrappage, can have efficiency benefits by addressing unintended consequences of policies that target new capital. The paper also argues that retirement subsidies are likely to be a relatively progressive policy instrument as compared with alternatives. Policy makers should understand the role that such policies might play in fostering equitable decarbonization of the economy.

  PublisherDOI

• Replication Data for: 'Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient?'

  Harvard Dataverse · 2023-03-08 · 1 citations

  datasetOpen access

  The data and programs replicate tables and figures from "Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient?", by Jacobsen, Sallee, Shapiro, and van Benthem. Please see JSSvB QJE replication guide for additional details.

  PublisherDOI

• Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient?

  The Quarterly Journal of Economics · 2023 · 38 citations

  • Political Science
  • Environmental economics
  • Natural resource economics

  Abstract The world has 1.4 billion passenger vehicles. How should governments regulate their air pollution emissions? A Pigouvian tax is technologically infeasible. Most countries instead rely on exhaust standards that limit air pollution emissions per mile for new vehicles. We assess the effectiveness and efficiency of these standards, which are the centerpiece of U.S. Clean Air Act regulation of transportation, and counterfactual policies. We show that the air pollution emissions per mile of new U.S. vehicles has fallen spectacularly, by over 99%, since standards began in 1967. Several research designs with a half century of data suggest that exhaust standards have caused most of this decline. Yet exhaust standards are not cost-effective in part because they fail to encourage scrap of older vehicles, which account for the majority of emissions. To study counterfactual policies, we develop an analytical and a quantitative model of the vehicle fleet. Analysis of these models suggests that tighter exhaust standards increase social welfare and increasing registration fees on dirty vehicles yields even larger gains by accelerating scrap, although both reforms have complex effects on inequality.

  PublisherDOI

• Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient?

  National Bureau of Economic Research · 2022-12-01 · 18 citations

  reportOpen access
  PublisherDOI

• Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient?

  SSRN Electronic Journal · 2022-01-01 · 12 citations

  articleOpen access
  PublisherDOI

• Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient?

  SSRN Electronic Journal · 2022-01-01 · 2 citations

  articleOpen access
  PublisherDOI

Frequent coauthors

• Arthur van Benthem

  82 shared

• Mark R. Jacobsen

  82 shared

• Christopher R. Knittel

  National Bureau of Economic Research

  77 shared

• Koichiro Ito

  University of Chicago

  53 shared

• Soren Anderson

  43 shared

• Carolyn Fischer

  20 shared

• Ian Parry

  19 shared

• Joseph Shapiro

  University of California, Berkeley

  12 shared