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Consequences of alternative US cap-and-trade policies: Controlling both emissions and costs

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  • Warwick J. McKibbin
  • Adele Morris
  • Peter J. Wilcoxen
  • Yiyong Cai

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.

Suggested Citation

  • Warwick J. McKibbin & Adele Morris & Peter J. Wilcoxen & Yiyong Cai, 2009. "Consequences of alternative US cap-and-trade policies: Controlling both emissions and costs," CAMA Working Papers 2009-18, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2009-18
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2021-06/18_mckibbin_morris_wilcoxen_cai_2009.pdf
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    References listed on IDEAS

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    1. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, December.
    2. Henderson, Dale W. & McKibbin, Warwick J., 1993. "A comparison of some basic monetary policy regimes for open economies: implications of different degrees of instrument adjustment and wage persistence," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 221-317, December.
    3. Warwick McKibbin & Peter Wilcoxen, 2008. "Building On Kyoto: Towards A Realistic Global Climate Agreement," CAMA Working Papers 2008-13, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    4. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39, pages 137-137.
    5. Warwick J. McKibbin & Peter J. Wilcoxen, 1997. "A Better Way to Slow Global Climate Change," Economics and Environment Network Working Papers 9702, Australian National University, Economics and Environment Network.
    6. Warwick J. McKibbin & Peter J. Wilcoxen, 2002. "The Role of Economics in Climate Change Policy," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 107-129, Spring.
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    Cited by:

    1. Warwick J. Mckibbin & Adele C. Morris & Peter J. Wilcoxen, 2011. "Comparing Climate Commitments: A Model-Based Analysis Of The Copenhagen Accord," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 79-103.
    2. Nakgyoon Choi, 2010. "General Equilibrium Analysis of DDA Trade Liberalization : Assessment of Alternative Scenarios," Trade Working Papers 23109, East Asian Bureau of Economic Research.
    3. Cai, Yiyong & Arora, Vipin, 2015. "Disaggregating electricity generation technologies in CGE models: A revised technology bundle approach with an application to the U.S. Clean Power Plan," Applied Energy, Elsevier, vol. 154(C), pages 543-555.
    4. Yiyong Cai & Yingying Lu & Alison Stegman & David Newth, 2017. "Simulating emissions intensity targets with energy economic models: algorithm and application," Annals of Operations Research, Springer, vol. 255(1), pages 141-155, August.
    5. McKibbin, Warwick J. & Morris, Adele C. & Wilcoxen, Peter J., 2014. "Pricing carbon in the U.S.: A model-based analysis of power-sector-only approaches," Resource and Energy Economics, Elsevier, vol. 36(1), pages 130-150.
    6. McKibbin, Warwick J. & Wilcoxen, Peter J., 2013. "A Global Approach to Energy and the Environment," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 995-1068, Elsevier.

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