Potential Challenges Faced by the U.S. Chemicals Industry under a Carbon Policy

Andrea Bassi and Joel Yudken
Additional contact information
Andrea Bassi: Millennium Institute, 2111 Wilson Blvd, Suite 700, Arlington, VA 20001, USA
Joel Yudken: High Road Strategies / 104 N, Columbus Street, Arlington, VA 22203, USA

Sustainability, 2009, vol. 1, issue 3, 1-20

Abstract: Chemicals have become the backbone of manufacturing within industrialized economies. Being energy-intensive materials to produce, this sector is threatened by policies aimed at combating and adapting to climate change. This study examines the worst-case scenario for the U.S. chemicals industry when a medium CO 2 price policy is employed. After examining possible industry responses, the study goes on to identify and provide a preliminary evaluation of potential opportunities to mitigate these impacts. If climate regulations are applied only in the United States, and no action is taken to invest in advanced low- and no-carbon technologies to mitigate the impacts of rising energy costs, the examination shows that climate policies that put a price on carbon could have substantial impacts on the competiveness of the U.S. chemicals industry over the next two decades. In the long run, there exist technologies that are available to enable the chemicals sector to achieve sufficient efficiency gains to offset and manage the additional energy costs arising from a climate policy.

Keywords: chemicals; petrochemical; chlorine; alkaline; climate policy; dynamic modeling; industry competitiveness; cap and trade (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2009
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/2071-1050/1/3/592/pdf (application/pdf)
https://www.mdpi.com/2071-1050/1/3/592/ (text/html)

Related works:
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:gam:jsusta:v:1:y:2009:i:3:p:592-611:d:5683

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().