Modeling Economy-wide vs Sectoral Climate Policies Using Combined Aggregate-Sectoral Models

William Pizer, Dallas Burtraw, Winston Harrington, Richard Newell and James Sanchirico

The Energy Journal, 2006, vol. 27, issue 3, 135-168

Abstract: Economic analyses of climate change policies frequently focus on reductions of energy-related carbon dioxide emissions via market-based, economy-wide policies. The current course of environment and energy policy debate in the United States, however, suggests an alternative outcome: sector-based and/or inefficiently designed policies. This paper uses a collection of specialized, sector-based models in conjunction with a computable general equilibrium model of the economy to examine and compare these policies at an aggregate level. We examine the relative cost of different policies designed to achieve the same quantity of emission reductions. We find that excluding a limited number of sectors from an economy-wide policy does not significantly raise costs. Focusing policy solely on the electricity and transportation sectors doubles costs, however, and using non-market policies can raise cost by a factor of ten. These results are driven in part by, and are sensitive to, our modeling of pre-existing tax distortions.

Keywords: CO2 emissions; climate change policy; CGE model; CAFÉ; electricity industry; US (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.5547/ISSN0195-6574-EJ-Vol27-No3-8 (text/html)

Related works:
Journal Article: Modeling Economy-wide vs Sectoral Climate Policies Using Combined Aggregate-Sectoral Models (2006)
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:sae:enejou:v:27:y:2006:i:3:p:135-168

DOI: 10.5547/ISSN0195-6574-EJ-Vol27-No3-8

Access Statistics for this article

More articles in The Energy Journal
Bibliographic data for series maintained by SAGE Publications ().