The Competitiveness Impacts of Climate Change Mitigation Policies
The pollution haven hypothesis suggests that unilateral domestic climate change mitigation policy would impose significant economic costs on carbon-intensive industries, resulting in declining output and increasing net imports. In order to evaluate this hypothesis, we undertake a two-step empirical analysis. First, we use historic energy prices as a proxy for climate change mitigation policy. We estimate how production and net imports change in response to energy prices using a 35-year panel of approximately 450 U.S. manufacturing industries. Second, we take these estimated relationships and use them to simulate the impacts of changes in energy prices resulting from a domestic climate change mitigation policy that effectively imposes a $15 per ton carbon price. We find that energy-intensive manufacturing industries are more likely to experience decreases in production and increases in net imports than less-intensive industries. Our best estimate is that competitiveness effects – measured by the increase in net imports – are as large as 0.8 percent for the most energy-intensive industries and represent no more than about one-sixth of the estimated decrease in production under a $15 per ton carbon price.
|Date of creation:||Dec 2011|
|Date of revision:|
|Publication status:||published as Joseph E. Aldy & William A. Pizer, 2015. "The Competitiveness Impacts of Climate Change Mitigation Policies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(4), pages 565 - 595.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- 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.
- repec:clg:wpaper:2008-02 is not listed on IDEAS
- Arik Levinson & M. Scott Taylor, 2004.
"Unmasking the Pollution Haven Effect,"
NBER Working Papers
10629, 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.
- 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, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
- Josh Ederington, Arik Levinson & Jenny Minier, 2003.
"Footlose and Pollution Free,"
gueconwpa~03-03-04, Georgetown University, Department of Economics.
- Vernon Henderson, 1995.
"Effects of Air Quality Regulation,"
NBER Working Papers
5118, National Bureau of Economic Research, Inc.
- Henk Folmer & John List & Tim Jeppesen, 2002.
"Environmental Regulations and New Plant Location Decisions: Evidence from a Meta-Analysis,"
Natural Field Experiments
00511, The Field Experiments Website.
- 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.
- 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.
- 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.
- Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:17705. 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.