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The Competitiveness Impacts of Climate Change Mitigation Policies

Author

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  • Aldy, Joseph E.

    (Harvard University and Resources for the Future)

  • Pizer, William A.

    (Duke University and Resources for the Future)

Abstract

We develop a precise definition of the competitiveness impacts of environmental regulation that can be estimated with available domestic production, trade, and energy price data. We use this definition and a 9-year panel of nearly 450 U.S. manufacturing industries to estimate and predict the effects of a U.S.-only $15 per ton CO2 price. We find competitiveness effects on the order of a 0.5 to 0.8 percent decline in production among energy-intensive manufacturing industries, representing about one-sixth of the policy's impacts on these firms' output.

Suggested Citation

  • Aldy, Joseph E. & Pizer, William A., 2014. "The Competitiveness Impacts of Climate Change Mitigation Policies," Working Paper Series rwp14-025, Harvard University, John F. Kennedy School of Government.
    • Handle: RePEc:ecl:harjfk:rwp14-025
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    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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