Keep calm and carry on emitting: cap-and-trade rules, local emissions and growth

Danilo V. Mascia and Enrico Onali

Regional Studies, 2024, vol. 58, issue 1, 220-237

Abstract: We estimate the impact of the Cap-and-Trade Program (CATP) in California on regional greenhouse gas emissions and economic growth. Our preferred identification strategies, based on spatial distance and county-level contiguity, fail to provide evidence of a reduction in regional emissions or economic growth due to the CATP. Multi-state organisations do not transfer emissions to non-Californian facilities, but parent-level concentration in emissions changes, consistent with an insofar unexplored form of regulatory arbitrage. Overall, our results highlight the importance of a regional approach when designing climate policies and evaluating their effects.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:taf:regstd:v:58:y:2024:i:1:p:220-237

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DOI: 10.1080/00343404.2023.2194315

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