Energy Efficiency Dynamics and Climate Policy

Gregory Casey, Yang Gao and Gregory P. Casey
Authors registered in the RePEc Author Service: Gregory P. Casey

No 11303, CESifo Working Paper Series from CESifo

Abstract: We study the effectiveness of climate change mitigation policies in reducing carbon emissions, focusing on the channel of economy-wide energy efficiency. Using U.S. data, we estimate impulse response functions (IRFs) that characterize how energy efficiency responds to energy price shocks. Standard climate-economy models cannot replicate the slow transition dynamics observed in the data. We build a tractable model that nests the existing literature and can closely replicate the empirical IRFs. The slow dynamics in our model imply that carbon taxes reduce cumulative emissions less than predicted by standard models and that clean energy subsidies reduce cumulative emissions more than predicted by standard models.

Keywords: climate change; climate policy; energy efficiency (search for similar items in EconPapers)
JEL-codes: E24 O33 O44 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11303

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