Seminar: "What Do the Machines Run On? Energy, Automation, and Climate Policy" - Ibrahim Tahri

Department of Food, Agricultural, and Resource Economics Seminar

Join us for a presentation by Ibrahim Tahri of IIASA (International Institute of Applied Systems Analysis).

Seminar Title: What Do the Machines Run On? Energy, Automation, and Climate Policy

Brief Abstract: Automation is usually analyzed as a labor market phenomenon. But machines need energy, and different forms of automation have very different energy requirements: cognitive automation is electricity-intensive, while physical automation can reduce the energy needed to operate workplaces built around human workers. This creates a direct interaction with climate policy. When a firm is just indifferent between performing a task with labor and automating it, the two options cost the same and produce the same output, but they need not produce the same emissions. The privately chosen automation decision is therefore inefficient when emissions are unpriced. We develop this mechanism in a task-based model with energy as an essential input. A carbon price shifts the composition of automation rather than its overall level, redirects innovation towards more energy-efficient AI, and slows the displacement of routine cognitive workers while accelerating it for manual workers.

Short Biography: Ibrahim Tahri is a Research Scholar at the International Institute for Applied Systems Analysis (IIASA) in Laxenburg, Austria. He is a macroeconomist and financial economist whose research examines the interactions between macroeconomic dynamics, financial markets, and climate policy, with a particular focus on financing the green transition. He holds a Ph.D. in Economics from The New School for Social Research (NSSR) in New York, where he was a Fulbright Scholar. His research has been published in journals including the Journal of Environmental Economics and Management and the Journal of Economic Behavior and Organization. His work draws on extensive experience in macroeconomic and financial modeling, including the valuation of environmental externalities and the financing of structural economic transitions.