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CONSEQUENCES OF ALTERNATIVE U.S. CAP-AND-TRADE POLICIES: CONTROLLING BOTH EMISSIONS AND COSTS

Warwick McKibbin (), Adele Morris, Peter Wilcoxen and Yiyong Cai

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: The U.S. Congress continues to debate a potential cap-and-trade program for the control of greenhouse gas emissions. The economic effects of such a bill remain in dispute, with some arguing that a cap-and-trade program would create jobs and improve economic growth and others arguing that the program would shift jobs overseas and hit households with large energy price increases. This report applies a state-of-the art global economic model to the question and offers insights to policymakers about how to the design the program to achieve long run environmental goals at minimum cost and with low risk to the economy.

Date: 2009-07
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