Regional and Aggregate Economic Consequences of Environmental Policy

Tom Schmitz, Italo Colantone and Gianmarco Ottaviano

No 343507, FEEM Working Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: This paper shows how to combine microeconometric evidence on the effects of environmental policy with a macroeconomic model, accounting for general equilibrium spillovers that have mostly been ignored in the literature. To this end, we study the effects of a recent US air pollution policy. We use regression evidence on the policy’s impact across industries and local labor markets to calibrate a quantitative spatial model allowing for general equilibrium spillovers. Our model implies that the policy lowered emissions by 11.1%, but destroyed approximately 250’000 jobs. Ignoring spillovers overestimates job losses in polluting industries, but underestimates job losses in clean industries.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 64
Date: 2024-06-18
New Economics Papers: this item is included in nep-ene, nep-env, nep-geo and nep-ure
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Downloads: (external link)
https://ageconsearch.umn.edu/record/343507/files/NDL2024-10.pdf (application/pdf)

Related works:
Working Paper: Regional and aggregate economic consequences of environmental policy (2024)
Working Paper: Regional and Aggregate Economic Consequences of Environmental Policy (2024)
Working Paper: Regional and aggregate economic consequences of environmental policy (2024)
Working Paper: Regional and Aggregate Economic Consequences of Environmental Policy (2024)
Working Paper: Regional and Aggregate Economic Consequences of Environmental Policy (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemwp:343507

DOI: 10.22004/ag.econ.343507

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