Faculty Affiliate Spotlight: Maximilian Auffhammer
October 1, 2025
Professor Maximilian Auffhammer, Avice M. Saint Professor of Agricultural and Resource Economics & Political Economy at UC Berkeley, recently sat down with Executive Director Andrew Campbell and discussed his professional path and what motivates him as a researcher.
What led you to become an energy and environmental economist?
I grew up in Europe when the Black Forest was dying from sulfuric acid in rain. The Chernobyl disaster happened when I was a teenager, and we couldn’t play outside. I became interested in transboundary pollution problems – how decisions people make elsewhere affect my well being. Later in high school I read about climate change, the ultimate transboundary pollution problem. Everybody’s actions affect everybody else. I really liked chemistry and biology so I went to college to be an environmental scientist at UMass Amherst. And then halfway through I heard a talk by one of Berkeley’s famous graduates, John Kenneth Galbraith. He talked about how you can change the world by changing something invisible – incentives and prices. That was a true “wow” moment for me. This is change that doesn’t happen in a beaker or by shoveling up polluted soil. I pivoted and enrolled in a Masters in Environmental Economics program. Then one of my professors suggested, “Hey, Max, why don’t you get a PhD?” I went to UC San Diego where I worked with the only environmental economist in the department as my dissertation advisor. I wrote on the drivers of future greenhouse gas emissions in China. What I really like about academia is you come up with questions you find worth answering, and then you answer them. You rely on your brilliant peers to help you check them and then you own the answer and publish it. You are pushing the frontier of knowledge forward. I found that really appealing.
What brought you to UC Berkeley and the Energy Institute?
As I was completing my PhD at UC San Diego I applied for 180 jobs (which back then entailed licking many stamps). Berkeley posted a position that was split between two units – Political Economy, and Agricultural and Resource Economics. I applied. This was and continues to be the place where the most brilliant minds work on these issues. Berkeley itself is beautiful, and I really wanted that job. So, long story short, I got lucky, and I ended up here. I was terrified and excited. I still feel very privileged. I enjoy the job as much now as on Day One.
I didn’t know very much about the Energy Institute in the beginning because I wasn’t working in energy markets. And then one day, when we still had phones on our desks with wires attached to them, the phone rang and Severin Borenstein was on the phone. He said, “Hey, Max, we have this grant that lets us invite people who are not currently working on energy markets to hang out with us for a semester. You can come to our lunches. We’ll talk about energy markets and you can talk about your research.” So I did this. The Energy Institute lunches are legendary – the faculty, graduate students and staff sit around a table and talk about questions and methods and problems facing energy markets. The Energy Institute attracts amazing economists who have incredible institutional knowledge of how these markets work and don’t work. This is really people trying to improve the functioning of markets and increasing societal well being. So I walked in and never walked out.
How would you describe your overall research focus?
Some academics have one topic that they study and write papers about all of the time. I’m the opposite. I walk through the world and then an idea pops up. If no one else has ever studied the idea, and I feel like I have the tools, I study the idea. I’ve researched what happens to energy consumption if the world gets hotter. If it’s hotter in the summer, yes, there’ll be more air conditioning use. But in the winter there’ll be less heating. That will reduce both natural gas consumption and electricity consumption because you blow less hot air around homes. I’m also interested in the transportation sector. My dad worked for a trucking company, and I’ve always really liked big trucks. I’ve driven trucks, loaded trucks, driven forklifts. Trucks are hugely important for the economy. Trucking provides almost two million jobs in the United States. They are also one of the biggest sources of air pollution and greenhouse gases. I have been working with colleagues from Lawrence Berkeley National Lab to figure out how to electrify long range, heavy duty trucking. We’ve developed soup-to-nuts full life cycle analyses to figure out if electrification makes sense. And it turns out, taking economics seriously changes the answer!
What is one research project you are most proud of?
I’ve worked with a colleague, Michael Anderson, on the impacts of car crashes. What if you drive a really big car and you hit somebody in a lighter car, what happens to the probability of death of the person driving a small car? It’s a research question that everybody understands right away. In seminar presentations, I would bring my kid’s matchbox cars to show how the statistical identification methodology works. We had access to some incredible data from federal sources, although these data sources are now under threat. We quantified the consequences. The answers were hugely policy relevant. We’re now replicating our US project with Swedish data. We are studying additional impacts including injuries, labor market consequences and health expenditures.
Finally, what’s an ongoing project that you’re excited about?
I am involved in a project led by Tamma Carleton in which we are trying to come up with a way to project climate impacts super locally in California. We are considering that how people react to heat events is very different in different areas. For example, in San Francisco, you might not have an air conditioner, so when it gets hot, you’re going to be exposed to much more heat than if you are in Fresno where everybody has an air conditioner. We are trying to come up with a set of projections and tools that allow local county officers or local public health authorities to figure out what the impact of climate change will be on their residents.