The Competitiveness Impacts of Climate Change Mitigation Policies
The pollution haven hypothesis suggests that unilateral domestic emission mitigation policies could cause adverse "competitiveness" impacts on domestic manufacturers as they lose market share to foreign competitors and relocate production activity--and emissions--to unregulated economies. We construct a precise definition of competitiveness impacts appropriate for climate change regulation that can be estimated exclusively with domestic production and net import data. We use this definition and a 20+ year panel of 400+ U.S. manufacturing industries to estimate the effects of energy prices, which is in turn used to simulate the impacts of carbon pricing policy. We find that a U.S.-only $15 per ton CO2 price will cause competitiveness effects on the order of a 1.0 to 1.3 percent decline in production among the most energy-intensive manufacturing industries. This amounts to roughly one-third of the total impact of a carbon pricing policy on these firms' economic output.
|Date of creation:||Dec 2011|
|Date of revision:|
|Contact details of provider:|| Postal: 79 JFK Street, Cambridge, MA 02138|
Web page: http://www.ksg.harvard.edu/research/working_papers/index.htm
More information through EDIRC
References listed on IDEAS
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.:
- Josh Ederington, Arik Levinson & Jenny Minier, 2003.
"Footlose and Pollution Free,"
gueconwpa~03-03-04, Georgetown University, Department of Economics.
- Morgenstern, Richard D. & Pizer, William A. & Shih, Jhih-Shyang, 2002.
"Jobs Versus the Environment: An Industry-Level Perspective,"
Journal of Environmental Economics and Management,
Elsevier, vol. 43(3), pages 412-436, May.
- Pizer, William & Morgenstern, Richard & Shih, Jhih-Shyang, 1999. "Jobs Versus the Environment: An Industry-level Perspective," Discussion Papers dp-99-01-rev, Resources For the Future.
- Grossman, G.M & Krueger, A.B., 1991.
"Environmental Impacts of a North American Free Trade Agreement,"
158, Princeton, Woodrow Wilson School - Public and International Affairs.
- Gene M. Grossman & Alan B. Krueger, 1991. "Environmental Impacts of a North American Free Trade Agreement," NBER Working Papers 3914, National Bureau of Economic Research, Inc.
- Grossman, Gene & Krueger, Alan B, 1992. "Environmental Impacts of a North American Free Trade Agreement," CEPR Discussion Papers 644, C.E.P.R. Discussion Papers.
- Matthew E. Kahn & Erin T. Mansur, 2010. "How Do Energy Prices, and Labor and Environmental Regulations Affect Local Manufacturing Employment Dynamics? A Regression Discontinuity Approach," NBER Working Papers 16538, National Bureau of Economic Research, Inc.
- Henderson, J Vernon, 1996.
"Effects of Air Quality Regulation,"
American Economic Review,
American Economic Association, vol. 86(4), pages 789-813, September.
- repec:clg:wpaper:2008-02 is not listed on IDEAS
- Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc.
- Arik Levinson & M. Scott Taylor, 2004.
"Unmasking the Pollution Haven Effect,"
NBER Working Papers
10629, National Bureau of Economic Research, Inc.
- Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 1998.
"Is Free Trade Good for the Environment?,"
NBER Working Papers
6707, National Bureau of Economic Research, Inc.
- Tim Jeppesen & John A. List & Henk Folmer, 2002. "Environmental Regulations and New Plant Location Decisions: Evidence from a Meta-Analysis," Journal of Regional Science, Wiley Blackwell, vol. 42(1), pages 19-49.
When requesting a correction, please mention this item's handle: RePEc:ecl:harjfk:rwp11-047. 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: ()
If references are entirely missing, you can add them using this form.