IDEAS home Printed from https://ideas.repec.org/p/rff/dpaper/dp-11-05.html
   My bibliography  Save this paper

California Industry Impacts of a Statewide Carbon Pricing Policy with Output-Based Rebates

Author

Listed:
  • Morgenstern, Richard

    () (Resources for the Future)

  • Moore, Eric

    () (Resources for the Future)

Abstract

This study estimates the impacts on a disaggregated set of California industries of introducing a carbon pricing policy within the state.. Two time horizons are considered, the “very short run” and the “short run”. To limit adverse impacts on the state’s energy-intensive and trade-exposed (EITE) industries, we develop illustrative policy options involving free allowance allocations of emissions permits to particular industries and limited border adjustments on coal, natural gas, crude oil, and refined petroleum product imports, as well as on electricity. Overall, we find relatively small impacts on energy-intensive industries with the rebates in place. The average reduction in EITE output is 0.4 percent. There is, however, considerable variation in impacts among the EITE industries. We also find that the ability to pass on costs, as assumed in the short run case, dramatically reduces adverse profit impacts to less than 1.5 percent in most cases, regardless of the rebate scenario. Based on national-level modeling done outside of this study, we estimate that over the long term, the average EITE output losses with the rebates in place would be expected to be somewhat smaller than the results reported here.

Suggested Citation

  • Morgenstern, Richard & Moore, Eric, 2011. "California Industry Impacts of a Statewide Carbon Pricing Policy with Output-Based Rebates," Discussion Papers dp-11-05, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-11-05
    as

    Download full text from publisher

    File URL: http://www.rff.org/RFF/documents/RFF-DP-11-05.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jonathan E. Hughes & Christopher R. Knittel & Daniel Sperling, 2008. "Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand," The Energy Journal, International Association for Energy Economics, vol. 29(1), pages 113-134.
    2. Soo Jung Ha & Geoffrey Hewings & Karen Turner, 2008. "Econometric estimation of Armington import elasticities for regional CGE models of the Chicago and Illinois economies," Working Papers 0810, University of Strathclyde Business School, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    carbon price; competitiveness; input-output analysis; output-based allocation;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-11-05. 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: (Webmaster). General contact details of provider: http://edirc.repec.org/data/degraus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.