The Review of Economics and Statistics Vol. 97 No. 5 2015

Some Inconvenient Truths about Climate Change Policy: The Distributional Impacts of Transportation Policies

Stephen P. Holland^1,2; Jonathan E. Hughes³; Christopher R. Knittel^1,4,5; Nathan Parker⁶

¹ National Bureau of Economic Research · ² University of North Carolina at Greensboro · ³ University of Colorado System · ⁴ Moscow Institute of Thermal Technology · ⁵ Massachusetts Institute of Technology · ⁶ University of California, Davis

Abstract

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.

DOI

10.1162/rest_a_00452

Volume

97

Issue

5

Pages

1052-1069

Language

en

Sources

openalex crossref

Cite

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