Some Inconvenient Truths about Climate Change Policy: The Distributional Impacts of Transportation Policies
Author(s)Holland, Stephen P.; Hughes, Jonathan E.; Parker, Nathan C.; Knittel, Christopher Roland
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Climate policy has favored costly measures that implicitly or explicitly subsidize lowcarbon fuels.We simulate four transportation sector policies: cap and trade (CAT), ethanol subsidies, a renewable fuel standard (RFS), and a lowcarbon fuel standard. Our simulations confirm that alternatives to CAT are 2.5 to 4 times more costly but are amenable to adoption due to right-skewed distributions of gains. We analyze voting on the Waxman-Markey (WM) CAT bill. Conditional on a district’s CAT gains, a district’s RFS gains are negatively correlated with the likelihood of voting for WM. Our analysis supports campaign contributions as a partial mechanism.
DepartmentSloan School of Management
Review of Economics and Statistics
Holland, Stephen P., Jonathan E. Hughes, Christopher R. Knittel, and Nathan C. Parker. “Some Inconvenient Truths About Climate Change Policy: The Distributional Impacts of Transportation Policies.” Review of Economics and Statistics 97, no. 5 (December 2015): 1052–1069. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology
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