Some Inconvenient Truths About Climate Change Policy: The Distributional Impacts of Transportation Policies
Instead of efficiently pricing greenhouse gases, policy makers have favored measures that implicitly or explicitly subsidize low carbon fuels. We simulate a transportation-sector cap & trade program (CAT) and three policies currently in use: ethanol subsidies, a renewable fuel standard (RFS), and a low carbon fuel standard (LCFS). Our simulations confirm that the alternatives to CAT are quite costly—2.5 to 4 times more expensive. We provide evidence that the persistence of these alternatives in spite of their higher costs lies in the political economy of carbon policy. The alternatives to CAT exhibit a feature that make them amenable to adoption|a right skewed distribution of gains and losses where many counties have small losses, but a smaller share of counties gain considerably—as much as $6,800 per capita, per year. We correlate our estimates of gains from CAT and the RFS with Congressional voting on the Waxman-Markey cap & trade bill, H.R. 2454. Because Waxman-Markey (WM) would weaken the RFS, House members likely viewed the two policies as competitors. Conditional on a district's CAT gains, increases in a district's RFS gains are associated with decreases in the likelihood of voting for WM. Furthermore, we show that campaign contributions are correlated with a district's gains under each policy and that these contributions are correlated with a Member's vote on WM.
|Date of creation:||Aug 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (617) 253-3551
Fax: (617) 253-9845
Web page: http://tisiphone.mit.edu/RePEc
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.:
- Stephen P. Holland & Jonathan E. Hughes & Christopher R. Knittel, 2009.
"Greenhouse Gas Reductions under Low Carbon Fuel Standards?,"
American Economic Journal: Economic Policy,
American Economic Association, vol. 1(1), pages 106-46, February.
- Holland, Stephen P. & Knittel, Christopher R & Hughes, Jonathan E., 2008. "Greenhouse Gas Reductions under Low Carbon Fuel Standards?," Institute of Transportation Studies, Working Paper Series qt9gh5b4rv, Institute of Transportation Studies, UC Davis.
- Stephen P. Holland & Christopher R. Knittel & Jonathan E. Hughes, 2007. "Greenhouse Gas Reductions under Low Carbon Fuel Standards?," NBER Working Papers 13266, National Bureau of Economic Research, Inc.
- Holland, Stephen P & Knittel, Christopher R & Hughes, Jonathan E., 2008. "Greenhouse Gas Reductions under Low Carbon Fuel Standards?," Institute of Transportation Studies, Working Paper Series qt0177r7xp, Institute of Transportation Studies, UC Davis.
- Anderson, Soren T. & Kellogg, Ryan & Sallee, James M., 2013.
"What do consumers believe about future gasoline prices?,"
Journal of Environmental Economics and Management,
Elsevier, vol. 66(3), pages 383-403.
- Soren T. Anderson & Ryan Kellogg & James M. Sallee, 2011. "What Do Consumers Believe About Future Gasoline Prices?," NBER Working Papers 16974, National Bureau of Economic Research, Inc.
- Tol, Richard S. J., 2007.
"The Social Cost of Carbon: Trends, Outliers and Catastrophes,"
Economics Discussion Papers
2007-44, Kiel Institute for the World Economy.
- Tol, Richard S. J., 2008. "The Social Cost of Carbon: Trends, Outliers and Catastrophes," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 2, pages 1-22.
- Richard S.J. Tol, 2007. "The Social Cost Of Carbon: Trends, Outliers And Catastrophes," Working Papers FNU-144, Research unit Sustainability and Global Change, Hamburg University, revised Aug 2007.
- Gardner Bruce, 2007. "Fuel Ethanol Subsidies and Farm Price Support," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-22, December.
- Anderson, Soren T., 2012.
"The demand for ethanol as a gasoline substitute,"
Journal of Environmental Economics and Management,
Elsevier, vol. 63(2), pages 151-168.
- Michael I. Cragg & Matthew E. Kahn, 2009.
"Carbon Geography: The Political Economy of Congressional Support for Legislation Intended to Mitigate Greenhouse Gas Production,"
NBER Working Papers
14963, National Bureau of Economic Research, Inc.
- Michael I. Cragg & Yuyu Zhou & Kevin Gurney & Matthew E. Kahn, 2013. "Carbon Geography: The Political Economy Of Congressional Support For Legislation Intended To Mitigate Greenhouse Gas Production," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1640-1650, 04.
- Stephen P. Holland, 2009. "Taxes and Trading versus Intensity Standards: Second-Best Environmental Policies with Incomplete Regulation (Leakage) or Market Power," NBER Working Papers 15262, National Bureau of Economic Research, Inc.
- George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
- Michael J. Roberts & Wolfram Schlenker, 2013.
"Identifying Supply and Demand Elasticities of Agricultural Commodities: Implications for the US Ethanol Mandate,"
American Economic Review,
American Economic Association, vol. 103(6), pages 2265-95, October.
- Michael J. Roberts & Wolfram Schlenker, 2010. "Identifying Supply and Demand Elasticities of Agricultural Commodities: Implications for the US Ethanol Mandate," NBER Working Papers 15921, National Bureau of Economic Research, Inc.
- Alberto Salvo & Cristian Huse, 2011. "Is Arbitrage Tying the Price of Ethanol to that of Gasoline? Evidence from the Uptake of Flexible-Fuel Technology," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 119-148.
- Seltzer, Andrew J, 1995. "The Political Economy of the Fair Labor Standards Act of 1938," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1302-42, December.
- Wright, Gavin, 1974. "The Political Economy of New Deal Spending: An Econometric Analysis," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 30-38, February.
- Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers 12881, Iowa State University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:mee:wpaper:1116. 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: (Sharmila Ganguly)The email address of this maintainer does not seem to be valid anymore. Please ask Sharmila Ganguly to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.