Business, Government & the International Economy

- March 2025
- Case
Venezuela: The Rise and Fall of Chavism

By: Natalia Garbiras-Diaz
- March 2025
- Case
Venezuela: The Rise and Fall of Chavism

By: Natalia Garbiras-Diaz
- March 2025
- Case
Peru: 'A Beggar Perched on a Throne of Gold'

By: Sophus A. Reinert and Jonathan Schlefer
- March 2025
- Case
Peru: 'A Beggar Perched on a Throne of Gold'

By: Sophus A. Reinert and Jonathan Schlefer
- 2025
- Working Paper
Methane Abatement Costs in the Oil and Gas Industry: Survey and Synthesis

By: Joseph E. Aldy, Forest Reinhardt and Robert N. Stavins

There is growing recognition of the relative importance of anthropogenic emissions of methane as a contributor to global climate change. An important source of such emissions in some countries, including the United States, is the oil and gas (O&G) sector. This points to the importance of developing understanding of the marginal abatement cost functions for methane emissions reductions. Scholars have employed a diverse set of methodologies to estimate abatement costs, including engineering cost models, econometric analysis of natural gas markets, and statistical retrospective analysis of state-level regulation. We critically summarize these approaches and synthesize their results. We find significant potential for low-cost methane abatement in the O&G sector in the United States and elsewhere, although claims of widespread negative abatement cost opportunities should be taken with a grain of salt. We also find that the potential for low-cost abatement is not without limit. Whereas it appears that cutting methane emissions in half would be relatively inexpensive, a sharp uptick in marginal abatement cost may occur when reductions exceed 60 to 80 percent below baseline levels. This threshold may change over time with technological advances in remote sensing, which can reduce abatement costs at various levels of ambition.
- 2025
- Working Paper
Methane Abatement Costs in the Oil and Gas Industry: Survey and Synthesis

By: Joseph E. Aldy, Forest Reinhardt and Robert N. Stavins

There is growing recognition of the relative importance of anthropogenic emissions of methane as a contributor to global climate change. An important source of such emissions in some countries, including the United States, is the oil and gas (O&G) sector. This points to the importance of developing understanding of the marginal abatement cost...

About the Unit

The BGIE Unit conducts research on, and teaches about, the economic, political, social, and legal environment in which business operates. The Unit includes scholars trained in economics, political science, and history; in its work, it draws on perspectives from all three of these disciplines.

The following demonstrates one way of classifying the approaches the Unit takes to learning and teaching.

The Unit examines the “rules” and policies established by government and other non-business institutions that affect business in the United States.
The Unit turns to history to understand the origins of today’s business environment as well as some of the alternatives that have emerged from time to time.
The Unit examines other countries’ business environments and their historical development.
The BGIE group is deeply interested in the impact of globalization and the way rules are emerging to govern international economic transactions as globalization proceeds.

Recent Publications

Venezuela: The Rise and Fall of Chavism

By: Natalia Garbiras-Diaz

March 2025 |
Case |
Faculty Research

Keywords: Venezuela

Citation

Educators

Peru: 'A Beggar Perched on a Throne of Gold'

By: Sophus A. Reinert and Jonathan Schlefer

March 2025 |
Case |
Faculty Research

Citation

Educators

Methane Abatement Costs in the Oil and Gas Industry: Survey and Synthesis

By: Joseph E. Aldy, Forest Reinhardt and Robert N. Stavins

2025 |
Working Paper |
Faculty Research

There is growing recognition of the relative importance of anthropogenic emissions of methane as a contributor to global climate change. An important source of such emissions in some countries, including the United States, is the oil and gas (O&G) sector. This points to the importance of developing understanding of the marginal abatement cost functions for methane emissions reductions. Scholars have employed a diverse set of methodologies to estimate abatement costs, including engineering cost models, econometric analysis of natural gas markets, and statistical retrospective analysis of state-level regulation. We critically summarize these approaches and synthesize their results. We find significant potential for low-cost methane abatement in the O&G sector in the United States and elsewhere, although claims of widespread negative abatement cost opportunities should be taken with a grain of salt. We also find that the potential for low-cost abatement is not without limit. Whereas it appears that cutting methane emissions in half would be relatively inexpensive, a sharp uptick in marginal abatement cost may occur when reductions exceed 60 to 80 percent below baseline levels. This threshold may change over time with technological advances in remote sensing, which can reduce abatement costs at various levels of ambition.

Keywords: Emission Reduction; Environmental Sustainability; Climate Change; Pollutants; Energy Industry

Citation

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Culture and Contemporary Political Preferences

By: Vasiliki Fouka and Marco Tabellini

2025 |
Working Paper |
Faculty Research

This chapter reviews the literature on the relationship between culture and political preferences. We distinguish conceptually between the direct cultural transmission of political ideology and the transmission of more primitive preferences and beliefs that influence preferences over policies, parties, and forms of government. While there is substantial evidence that political preferences persist across generations and within communities, the literature often does not specify which primitive values and beliefs drive this persistence. A growing body of work points to a multifaceted mapping from underlying preferences and beliefs over the material world and social relations to political ideology. In this chapter, we summarize these studies, organize their findings in a coherent framework, and suggest possible directions for future research.

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Retrofitting Leninism: Participation Without Democracy in China | by Dimitar D. Gueorguiev // Outsourcing Repression: Everyday State Power in Contemporary China | by Lynette H. Ong

By: Meg Rithmire

March 2025 |
Book Review |
Pacific Affairs

Citation

Read Now

Lebanon: Splintering Cedar

By: Mattias Fibiger, Jaya Y. Wen, Sophus A. Reinert and Gerard Zouein

February 2025 |
Case |
Faculty Research

Citation

Educators

Turning Away from the State: Trade Shocks and Informal Insurance in Brazil

By: Paula Rettl

2025 |
Working Paper |
Faculty Research

How does economic globalization affect vote choices? Conventional wisdom holds that voters who lose from economic integration support parties that propose expanding the welfare state. However, in the Global South, where the state is frequently weak or under-resourced, people often turn to non-state organizations (such as churches) for protection against economic decline. I argue that, in these contexts, negative globalization shocks increase local communities’ dependence on non-state organizations, thereby making the leaders within such organizations more effective political brokers. To test this argument, I propose a shift-share instrument that measures the exposure of Brazilian local labor markets to exogenous changes in exports. By matching this instrument with electoral and survey data, I provide evidence that declining exports increased the power of evangelical leaders to persuade their congregations to vote against parties that favor welfare-state expansion. My findings help explain and describe the contingencies underlying the political consequences of globalization.

Keywords: Global Strategy; Globalized Economies and Regions; Governance; Government Administration; Political Elections; Voting; Latin America; Brazil; South America

Citation

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Research: The Costs of Circumventing Tariffs

By: Jaya Y. Wen, Ebehi Iyoha, Edmund Malesky and Sung-Ju Wu

February 13, 2025 |
Article |
Harvard Business Review Digital Articles

When tariffs are levied against a specific country, that country might attempt to circumvent the tariff by rerouting products through a third country to avoid the higher taxes. Research in the aftermath of the 2018 U.S.-China trade war examined this phenomenon, finding that, while tariff circumvention through Vietnam did happen, it wasn’t as widespread as many had initially thought. That said, there still was an increase in tariff circumvention more broadly, and specifically via Chinese-owned firms in Vietnam. The findings suggest that if a country is considering implementing tariffs, a better approach might involve ownership-based duties or firm-specific sanctions instead of blanket tariffs.

Keywords: Trade; Global Strategy; International Relations; United States; China

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