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Policies to Reduce CO2 Emissions: Fallacies and Evidence from the United States and California

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  • Granados, José A. Tapia
  • Spash, Clive L.

    ()

Abstract

Since the 1990s, advocates of policy to prevent catastrophic climate change have been divided over the appropriate economic instruments to curb CO2 emissions-carbon taxes or schemes of emission trading. Barack Obama claimed that policies implemented during his presidency set in motion irreversible trends toward a clean-energy economy, with the years 2008-2015 given as evidence of decoupling between CO2 emissions and economic growth. This is despite California being the only state in the USA that has implemented a specific policy to curb emissions, a cap-and-trade scheme in place since 2013. To assess Obama's claims and the effectiveness of policies to reduce CO2 emissions, we analyze national and state-level data from the USA over the period 1990-2015. We find: (a) annual changes in emissions strongly correlated with the growth conditions of the economy; (b) no evidence for decoupling; and (c) a trajectory of CO2 emissions in California which does not at all support the claim that the cap-and-trade system implemented there has reduced CO2 emissions.

Suggested Citation

  • Granados, José A. Tapia & Spash, Clive L., 2019. "Policies to Reduce CO2 Emissions: Fallacies and Evidence from the United States and California," SRE-Discussion Papers 6961, WU Vienna University of Economics and Business.
  • Handle: RePEc:wiw:wus009:6961
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    Keywords

    Climate change; Cap-and-trade; Carbon emissions trading; Decoupling; Economic growth;

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