Regional and Aggregate Economic Consequences of Environmental Policy

Tom Schmitz, Italo Colantone and Gianmarco Ottaviano
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Italo Colantone: Baffi-Carefin Research Centre, Bocconi University, CESifo and Fondazione Eni Enrico Mattei

No 2024.10, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper shows how to combine microeconometric evidence on the effects of environmental policy with a macroeconomic model, accounting for general equilibrium spillovers that have mostly been ignored in the literature. To this end, we study the effects of a recent US air pollution policy. We use regression evidence on the policy’s impact across industries and local labor markets to calibrate a quantitative spatial model allowing for general equilibrium spillovers. Our model implies that the policy lowered emissions by 11.1%, but destroyed approximately 250’000 jobs. Ignoring spillovers overestimates job losses in polluting industries, but underestimates job losses in clean industries.

Keywords: Environmental Policy; Fine Particles; Clean Air Act; Employment; Trade (search for similar items in EconPapers)
JEL-codes: E24 Q50 Q53 (search for similar items in EconPapers)
Date: 2024-06
New Economics Papers: this item is included in nep-env and nep-int
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Related works:
Working Paper: Regional and Aggregate Economic Consequences of Environmental Policy (2024)
Working Paper: Regional and aggregate economic consequences of environmental policy (2024)
Working Paper: Regional and Aggregate Economic Consequences of Environmental Policy (2024)
Working Paper: Regional and aggregate economic consequences of environmental policy (2024)
Working Paper: Regional and Aggregate Economic Consequences of Environmental Policy (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2024.10

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