Climate Change Mitigation Policies: Aggregate and Distributional Effects

Tiago Cavalcanti, Zeina Hasna and Cezar Santos

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: We evaluate the aggregate and distributional effects of climate change mitigation policies using a multi-sector equilibrium model with intersectoral input–output linkages and worker heterogeneity calibrated to different countries. The introduction of carbon taxes leads to changes in relative prices and inputs reallocation, including labor. For the United States, reaching its original Paris Agreement pledge would imply at most a 0.6% drop in output. This impact is distributed asymmetrically across sectors and individuals. In the US, workers with a comparative advantage in dirty energy sectors who do not reallocate suffer a welfare loss 12 times higher than workers in non-dirty sectors, but constitute less than 1% of the labor force.

Keywords: Climate change; carbon taxes; worker heterogeneity; labor reallocation (search for similar items in EconPapers)
JEL-codes: E13 H23 J24 (search for similar items in EconPapers)
Date: 2021-03-09
New Economics Papers: this item is included in nep-ene, nep-env, nep-lma, nep-mac and nep-reg
Note: tvdvc2, zh274
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.econ.cam.ac.uk/sites/default/files/pub ... pe-pdfs/cwpe2122.pdf

Related works:
Working Paper: Climate Change Mitigation Policies: Aggregate and Distributional Effects (2022)
Working Paper: Climate Change Mitigation Policies: Aggregate and Distributional Effects (2021)
Working Paper: Climate Change Mitigation Policies: Aggregate and Distributional Effects (2020)
Working Paper: Climate Change Mitigation Policies: Aggregate and Distributional Effects (2020)
Working Paper: Climate Change Mitigation Policies: Aggregate and Distributional Effects (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:2122

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer ().