Some Inconvenient Truths About Climate Change Policy: The Distributional Impacts of Transportation Policies

Stephen Holland, Jonathan Hughes (), Christopher Knittel and Nathan C. Parker

Working Papers from Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research

Abstract: Instead of efficiently pricing greenhouse gases, policy makers have favored measures that implicitly or explicitly subsidize low carbon fuels. We simulate a transportation-sector cap & trade program (CAT) and three policies currently in use: ethanol subsidies, a renewable fuel standard (RFS), and a low carbon fuel standard (LCFS). Our simulations confirm that the alternatives to CAT are quite costly—2.5 to 4 times more expensive. We provide evidence that the persistence of these alternatives in spite of their higher costs lies in the political economy of carbon policy. The alternatives to CAT exhibit a feature that make them amenable to adoption|a right skewed distribution of gains and losses where many counties have small losses, but a smaller share of counties gain considerably—as much as $6,800 per capita, per year. We correlate our estimates of gains from CAT and the RFS with Congressional voting on the Waxman-Markey cap & trade bill, H.R. 2454. Because Waxman-Markey (WM) would weaken the RFS, House members likely viewed the two policies as competitors. Conditional on a district's CAT gains, increases in a district's RFS gains are associated with decreases in the likelihood of voting for WM. Furthermore, we show that campaign contributions are correlated with a district's gains under each policy and that these contributions are correlated with a Member's vote on WM.

Date: 2011-08
New Economics Papers: this item is included in nep-ene, nep-env and nep-pol
References: Add references at CitEc
Citations:

Downloads: (external link)
http://tisiphone.mit.edu/RePEc/mee/wpaper/2011-016.pdf (application/pdf)

Related works:
Journal Article: Some Inconvenient Truths about Climate Change Policy: The Distributional Impacts of Transportation Policies (2015)
Working Paper: Some Inconvenient Truths About Climate Change Policy: The Distributional Impacts of Transportation Policies (2011)
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:mee:wpaper:1116

Access Statistics for this paper

More papers in Working Papers from Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research Contact information at EDIRC.
Bibliographic data for series maintained by Sharmila Ganguly ( this e-mail address is bad, please contact ).