Effects of a carbon price in the U.S. on economic sectors, resource use, and emissions: An input-output approach
Despite differences in their implementation, most carbon policies aim to have similar outcomes: effectively raising the price of carbon-intensive products relative to non-carbon-intensive products. While it is possible to predict the simple broad-scale economic impacts of raising the price of carbon-intensive products--the demand for non-carbon-intensive products will increase--understanding the economic and environmental impacts of carbon policies throughout the life cycle of both types of products is more difficult. Using the example of a carbon tax, this study proposes a methodology that integrates short-term policy-induced consumer demand changes into the input-output framework to analyze the environmental and economic repercussions of a policy. Environmental repercussions include the direct and the indirect impacts on emissions, materials flow in the economy, and the reliance on various ecosystem goods and services. The approach combines economic data with data about physical flow of fossil fuels between sectors, consumption of natural resources and emissions from each sector. It applies several input-output modeling equations sequentially and uses various levels of aggregation/disaggregation. It is illustrated with the data for the 2002 U.S. economy and physical flows. The framework provides insight into the short-term complex interactions between carbon price and its economic and environmental effects.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stefan Giljum & Klaus Hubacek, 2004. "Alternative Approaches of Physical Input-Output Analysis to Estimate Primary Material Inputs of Production and Consumption Activities," Economic Systems Research, Taylor & Francis Journals, vol. 16(3), pages 301-310.
- Michael Lahr & Louis de Mesnard, 2004.
"Biproportional Techniques in Input-Output Analysis: Table Updating and Structural Analysis,"
Economic Systems Research,
Taylor & Francis Journals, vol. 16(2), pages 115-134.
- Michael L. Lahr & Louis De Mesnard, 2004. "Biproportional Techniques in Input-Output Analysis: Table Updating and Structural Analysis," Post-Print halshs-00068608, HAL.
- Michael Lahr & Louis de Mesnard, 2004. "Biproportional Techniques in Input-Output Analysis: Table Updating and Structural Analysis," GE, Growth, Math methods 0403006, EconWPA.
- Espey, James A. & Espey, Molly, 2004.
"Turning on the Lights: A Meta-Analysis of Residential Electricity Demand Elasticities,"
Journal of Agricultural and Applied Economics,
Southern Agricultural Economics Association, vol. 36(01), April.
- Espey, James A. & Espey, Molly, 2004. "Turning on the Lights: A Meta-Analysis of Residential Electricity Demand Elasticities," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 36(01), pages 65-81, April.
- Pearce, David W, 1991. "The Role of Carbon Taxes in Adjusting to Global Warming," Economic Journal, Royal Economic Society, vol. 101(407), pages 938-948, July.
- Parikh, Ashok, 1979. "Forecasts of Input-Output Matrices Using the R.A.S. Method," The Review of Economics and Statistics, MIT Press, vol. 61(3), pages 477-481, August.
- Shrestha, Ram M. & Marpaung, Charles O. P., 1999. "Supply- and demand-side effects of carbon tax in the Indonesian power sector: an integrated resource planning analysis," Energy Policy, Elsevier, vol. 27(4), pages 185-194, April.
- Ukidwe, Nandan U. & Bakshi, Bhavik R., 2007. "Industrial and ecological cumulative exergy consumption of the United States via the 1997 input–output benchmark model," Energy, Elsevier, vol. 32(9), pages 1560-1592.
- Spees, Kathleen & Lave, Lester B., 2007. "Demand Response and Electricity Market Efficiency," The Electricity Journal, Elsevier, vol. 20(3), pages 69-85, April.
- Elizabeth Symons & John Proops & Philip Gay, 1994. "Carbon taxes, consumer demand and carbon dioxide emissions: a simulation analysis for the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 15(2), pages 19-43, May.
- Kulisic, Biljana & Loizou, Efstratios & Rozakis, Stelios & Segon, Velimir, 2007. "Impacts of biodiesel production on Croatian economy," Energy Policy, Elsevier, vol. 35(12), pages 6036-6045, December.
- Gay, Philip W. & Proops, John L.R., 1993. "Carbon---dioxide production by the UK economy: An input-output assessment," Applied Energy, Elsevier, vol. 44(2), pages 113-130.
- Molly Espey, 1996. "Explaining the Variation in Elasticity Estimates of Gasoline Demand in the United States: A Meta-Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 49-60.
- Steven Kraines & Yoshikuni Yoshida, 2004. "Process System Modelling of Production Technology Alternatives using Input- Output Tables with Sector Specific Units," Economic Systems Research, Taylor & Francis Journals, vol. 16(1), pages 21-32.
- Wolsky, Alan Martin, 1984. "Disaggregating Input-Output Models," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 283-291, May.
- Chang, Yih F. & Lewis, Charles & Lin, Sue J., 2008. "Comprehensive evaluation of industrial CO2 emission (1989-2004) in Taiwan by input-output structural decomposition," Energy Policy, Elsevier, vol. 36(7), pages 2471-2480, July.
- Hannon, Bruce, 2001. "Ecological pricing and economic efficiency," Ecological Economics, Elsevier, vol. 36(1), pages 19-30, January.
- Nguyen, Khanh Q., 2008. "Impacts of a rise in electricity tariff on prices of other products in Vietnam," Energy Policy, Elsevier, vol. 36(8), pages 3135-3139, August.
- Morgenstern, Richard D. & Ho, Mun & Shih, J.-S.Jhih-Shyang & Zhang, Xuehua, 2004. "The near-term impacts of carbon mitigation policies on manufacturing industries," Energy Policy, Elsevier, vol. 32(16), pages 1825-1841, November.
- Morgenstern, Richard & Shih, Jhih-Shyang & Ho, Mun & Zhang, Xuehua, 2002. "The Near-Term Impacts of Carbon Mitigation Policies on Manufacturing Industries," Discussion Papers dp-02-06-, Resources For the Future.
- Weisz, Helga & Duchin, Faye, 2006. "Physical and monetary input-output analysis: What makes the difference?," Ecological Economics, Elsevier, vol. 57(3), pages 534-541, May.
- Helga Weisz & Faye Duchin, 2004. "Physical and Monetary Input-Output Analysis: What Makes the Difference?," Rensselaer Working Papers in Economics 0422, Rensselaer Polytechnic Institute, Department of Economics, revised May 2005.
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:7:p:3527-3536. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.