The Competitiveness Impacts of Climate Change Mitigation Policies

Joseph Aldy and William Pizer

Journal of the Association of Environmental and Resource Economists, 2015, vol. 2, issue 4, 565 - 595

Abstract: The pollution haven hypothesis suggests that unilateral domestic climate change mitigation policy would impose significant economic costs on carbon-intensive industries, resulting in declining output and increasing net imports. In order to evaluate this hypothesis, we undertake a two-step empirical analysis. First, we estimate how production and net imports change in response to energy prices using a 35-year panel of approximately 450 US manufacturing industries. Second, we use these estimated relationships to simulate the impacts of changes in energy prices resulting from a $15 per ton carbon price. We find that energy-intensive manufacturing industries are more likely to experience decreases in production and increases in net imports than less-intensive industries. Our best estimate is that competitiveness effects--measured by the increase in net imports--are as large as 0.8% for the most energy-intensive industries and represent no more than about one-sixth of the estimated decrease in production.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (111)

Downloads: (external link)
http://dx.doi.org/10.1086/683305 (application/pdf)
http://dx.doi.org/10.1086/683305 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: The Competitiveness Impacts of Climate Change Mitigation Policies (2015)
Working Paper: The Competitiveness Impacts of Climate Change Mitigation Policies (2014)
Working Paper: The Competitiveness Impacts of Climate Change Mitigation Policies (2011)
Working Paper: The Competitiveness Impacts of Climate Change Mitigation Policies (2011)
Working Paper: The Competitiveness Impacts of Climate Change Mitigation Policies (2011)
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:ucp:jaerec:doi:10.1086/683305

Access Statistics for this article

More articles in Journal of the Association of Environmental and Resource Economists from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().