Research
Working Papers
Green AI in Industry
Quasi-Experimental Evidence from the Water Treatment Sector
Abstract
This paper studies the environmental effects of the large-scale deployment of AI-driven control systems across French wastewater treatment plants operated by a global leader in water supply services. Exploiting quasi-experimental variation in both the timing of adoption and outages, we estimate the causal impact of AI on energy use and carbon emissions. We find that AI allowed treated plants to reduce their electricity consumption and carbon emissions by 5.4% and 6% respectively, and electricity costs by 8.2%, resulting in negative abatement costs, while still improving water effluent quality. The additional electricity demand generated by AI servers represents less than 1% of these savings. Beyond these effects, AI-equipped plants prove more resilient to high operational stress during extreme meteorological events and chemical pollutant peaks. They also improve load management by reallocating electricity consumption from peak to off-peak hours. Finally, we use the DICE model to assess the aggregate implications of our findings in three diffusion scenarios. We find substantial global welfare gains from the CO\(_2\) reductions associated with this industrial AI use case.
The stock market value of corporate climate transition pledges
Abstract
Whether financial markets reward or penalize voluntary corporate decarbonization pledges shapes the private sector’s incentive to decarbonize. We assemble a global dataset of 558 time-stamped climate-commitment press releases by listed firms (2017–2023), sampled from a financial newswire to maximize the detectability of any market reaction. Announcements raise stock prices by a modest 0.23% on average (95% confidence interval 0.03–0.43%) over the first three trading days, after which the effect become indistinguishable. Reactions are statistically indistinguishable across third-party certification labels and are detectable only for US-incorporated firms. . They do not increase with carbon-price stringency; if anything, they are largest where no carbon price applies. Within the US, announcement returns polarized along state ESG politics over 2021–22, with a two-percentage-point reversal of the between group gap, alongside a sharp drop in the US share of global announcements. Rewards for publicizing climate commitments are modest and short-lived, and appear politically contingent.
Work in Progress
Global Portfolios and the Propagation of Political Shocks
Evidence from the Oil Industry