Regional and aggregate economic consequences of environmental policy

Tom Schmitz, Italo Colantone and Gianmarco Ottaviano

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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: 63 pages
Date: 2024-07-09
New Economics Papers: this item is included in nep-ene, nep-geo and nep-int
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Downloads: (external link)
http://eprints.lse.ac.uk/126761/ Open access version. (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:ehl:lserod:126761

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