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Potential Challenges Faced by the U.S. Chemicals Industry under a Carbon Policy


Author Info

  • Andrea Bassi

    (Millennium Institute, 2111 Wilson Blvd, Suite 700, Arlington, VA 20001, USA
    University of Bergen, Postboks 7800, 5020 Bergen, Norway)

  • Joel Yudken

    (High Road Strategies / 104 N, Columbus Street, Arlington, VA 22203, USA)

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    Chemicals have become the backbone of manufacturing within industrialized economies. Being energy-intensive materials to produce, this sector is threatened by policies aimed at combating and adapting to climate change. This study examines the worst-case scenario for the U.S. chemicals industry when a medium CO 2 price policy is employed. After examining possible industry responses, the study goes on to identify and provide a preliminary evaluation of potential opportunities to mitigate these impacts. If climate regulations are applied only in the United States, and no action is taken to invest in advanced low- and no-carbon technologies to mitigate the impacts of rising energy costs, the examination shows that climate policies that put a price on carbon could have substantial impacts on the competiveness of the U.S. chemicals industry over the next two decades. In the long run, there exist technologies that are available to enable the chemicals sector to achieve sufficient efficiency gains to offset and manage the additional energy costs arising from a climate policy.

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    Bibliographic Info

    Article provided by MDPI, Open Access Journal in its journal Sustainability.

    Volume (Year): 1 (2009)
    Issue (Month): 3 (September)
    Pages: 592-611

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    Handle: RePEc:gam:jsusta:v:1:y:2009:i:3:p:592-611:d:5683

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    Keywords: chemicals; petrochemical; chlorine; alkaline; climate policy; dynamic modeling; industry competitiveness; cap and trade;

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    Cited by:
    1. Broeren, M.L.M. & Saygin, D. & Patel, M.K., 2014. "Forecasting global developments in the basic chemical industry for environmental policy analysis," Energy Policy, Elsevier, Elsevier, vol. 64(C), pages 273-287.


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