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on Resource Economics |
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Issue of 2021‒02‒01
two papers chosen by |
| By: | Angela Köppl; Margit Schratzenstaller |
| Abstract: | In view of the challenges posed by climate change and the increase in climate targets by 2030 in the EU, as well as Austria's goal of achieving climate neutrality by 2040, the question of effective climate policy instruments is gaining in importance. The pricing of CO2, for instance in the form of a carbon tax, and the question of its effects are therefore attracting increasing attention in the academic as well as economic and environmental policy debate. The paper provides a detailed overview of the theoretical and empirical literature on the effects of carbon taxes. The focus is on the most important impact dimensions of carbon taxes: environmental effectiveness, effects on important macroeconomic variables (especially growth and employment), effects on innovation and competitiveness, distributional effects, and public acceptance. |
| Keywords: | Carbon Tax, Environmental Taxation, Double Dividend Hypothesis, Distributional Effects, Climate Policy, Price-based Instruments |
| Date: | 2021–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2021:i:619&r=all |
| By: | Joseph S. Shapiro; Reed Walker |
| Abstract: | This paper describes a novel approach to estimating the marginal cost of air pollution regulation, then applies it to assess whether a large set of existing U.S. air pollution regulations have marginal costs exceeding their marginal benefits. The approach utilizes an important yet underexplored provision of the Clean Air Act requiring new or expanding plants to pay incumbents in the same or neighboring counties to reduce their pollution emissions. These “offset” regulations create several hundred decentralized, local markets for pollution that differ by pollutant and location. We describe conditions under which offset transaction prices can be interpreted as measures of the marginal cost of pollution abatement, and we compare estimates of the marginal benefit of abatement from leading air quality models to offset prices. We find that for most regions and pollutants, the marginal benefits of pollution abatement exceed mean offset prices more than ten-fold. In at least one market, however, estimated marginal benefits are below offset prices. Marginal abatement costs are increasing rapidly in real terms. Notably, our revealed preference estimates of marginal abatement costs differ enormously from typical engineering estimates. Some evidence suggests that using price rather than existing quantity regulation in these markets may increase social welfare. |
| JEL: | H23 Q52 Q53 R11 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28199&r=all |