Distributed household effects of climate policy in the United States
Name
1191626159-MIT.pdf
Size
16.38 MB
Format
Adobe PDF
Checksum (MD5)
d7b1b66a065ce71b448eb13596e4a0fe
Author(s)
Green, Tomas W.(Tomas Wesley)
Advisor(s)
Chris Knittel.
Date Issued
2020
Publisher
Massachusetts Institute of Technology
Abstract
The net effects of various climate policies on households in the United States are assessed, with particular attention to the distribution of economic outcomes across geography, urbanity, and income groups. Climate policy has the potential to assess more costs to low-income households than high-income households (regressive) as well as more costs to rural households than metropolitan. The objective of this study was to improve the understanding of the potential for regressivity, geographic transfers, and rural-urban transfers among climate policy options and to test for ways to mitigate regressivity and unwanted transfers. Using different machine learning algorithms, I created a statistical model of the household carbon footprint (HCF) for an average household in each US Census tract. Policy outcomes were assessed by quantifying the net increase or decrease of annual household expenses (e.g.
electricity, utilities, and gasoline consumption) under 12 different policy scenarios, which included carbon pricing schemes, regulatory standards (Corporate Average Fuel Economy Standards, Clean Energy Standards, and the Clean Power Plan), and a scenario that combined carbon pricing and command-and-control regulation. I found that there is significant variation in carbon footprints with income and geography; income effects are mostly driven by higher footprints related to transportation and consumer products and services, while geographic effects are affected by the carbon intensity of the electricity grid. Carbon pricing, when accompanied with a dividend, is progressive for urban, rural, and suburban households. There are transfers from the Midwest and Plains to the Coasts when the dividend is evenly divided, but this can be mitigated though adjusting the dividend slightly (<8% increase or decrease).
Adjusting the dividend to increase the amount for low-income households and reduce the amount for high-income households benefits rural households more on average, but increases the overall heterogeneity of impacts within each income group. Adjusting the carbon dividend for both geography and urbanity increases the average benefit to low-income households and reduces the heterogeneity of impacts within income groups. The effects of the regulatory policy tends to be regressive and are, on average, a net cost to households who are low income - especially those in rural areas. Combining a carbon price and dividend with regulatory standards can remove the regressive trend of regulations, but regional and urban-rural transfers are harder to mitigate.
Description
Thesis: S.M. in Technology and Policy, Massachusetts Institute of Technology, School of Engineering, Institute for Data, Systems, and Society, May, 2020
Cataloged from the official PDF of thesis.
Includes bibliographical references (pages 79-83).
Subjects
Institute for Data, Systems, and Society.
Technology and Policy Program.
MIT Department
Massachusetts Institute of Technology. Institute for Data, Systems, and Society
Massachusetts Institute of Technology. Engineering Systems Division
Technology and Policy Program
Terms of Use
MIT theses may be protected by copyright. Please reuse MIT thesis content according to the MIT Libraries Permissions Policy, which is available through the URL provided.
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