Regional and Aggregate Economic Consequences of Environmental Policy 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 Policy; Employment; Trade; Clean Air Act (search for similar items in EconPapers)
JEL-codes: E24 Q50 Q53 (search for similar items in EconPapers)
Pages: 65
Date: 2024
New Economics Papers: this item is included in nep-ene, nep-env, nep-int and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:baf:cbafwp:cbafwp24225

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