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Articles 1 - 7 of 7
Full-Text Articles in Social and Behavioral Sciences
Negative Leakage, Kathy Baylis, Don Fullerton, Daniel H. Karney
Negative Leakage, Kathy Baylis, Don Fullerton, Daniel H. Karney
Kathy Baylis
Our analytical general equilibrium model solves for effects of a small increase in carbon tax on leakage - the increase in emissions elsewhere. Identical consumers buy two goods using income from endowments that are mobile between sectors. Usually an increase in one sector's tax raises output price, so consumption shifts to the other good, causing positive leakage. Here, we find a new negative effect not recognized in existing literature: the taxes sector substitutes away from carbon into clean inputs, so it may absorb resources, shrink the other sector and reduce their emissions. This "abatement resource effect" could offset some or …
Can Pollution Tax Rebates Protect Low-Wage Earners?, Don Fullerton, Holly Monti
Can Pollution Tax Rebates Protect Low-Wage Earners?, Don Fullerton, Holly Monti
Don Fullerton
Pollution taxes are believed to burden low-income households that spend a greater than average share of income on pollution-intensive goods. Some proposals offset that effect by returning revenue to low-income workers via reduced labor tax. We build analytical general equilibrium models with both high-skilled and low-skilled labor, and we solve for the change in real net wage of each group. A decomposition shows the separate effects of the tax rebate, higher product prices, and the changes in relative wage rates. We also include numerical examples. Even though the pollution tax injures both types of labor, in most cases we find …
Does The Indexing Of Government Transfers Make Carbon Pricing Progressive?, Don Fullerton, Garth Heutel, Gilbert Metcalf
Does The Indexing Of Government Transfers Make Carbon Pricing Progressive?, Don Fullerton, Garth Heutel, Gilbert Metcalf
Don Fullerton
We analyze both the uses side and the sources side incidence of domestic climate policy using an analytical general equilibrium model, taking into account the degree of government program indexing. When transfer programs such as Social Security are explicitly indexed to inflation, higher energy prices automatically lead to cost-of-living adjustments for recipients. We show results with no indexing, 100 percent indexing, and partial indexing based on our analysis of actual transfer programs. When households are classified by annual income, the indexing of U.S. transfers is not enough to offset the regressive uses side, but when they are classified by annual …
The Design And Implementation Of U.S. Climate Policy, Don Fullerton, Catherine Wolfram
The Design And Implementation Of U.S. Climate Policy, Don Fullerton, Catherine Wolfram
Don Fullerton
No abstract provided.
Introduction And Summary, Don Fullerton, Catherine Wolfram
Introduction And Summary, Don Fullerton, Catherine Wolfram
Don Fullerton
While economic models have already proven useful to analyze big picture questions about climate policy such as the choice between a carbon tax or cap-and-trade permit system, the 19 chapters in this book show how economic models also are useful to address the many remaining smaller questions that arise as policy is implemented. For example, chapters consider: the tradeoffs policymakers confront in deciding whether to implement the policy upstream on energy producers or downstream on energy users; how to monitor and enforce climate policy; how Federal actions might interact with climate policies at other levels of government or with other …
Six Distributional Effects Of Environmental Policy, Don Fullerton
Six Distributional Effects Of Environmental Policy, Don Fullerton
Don Fullerton
While prior literature has identified various effects of environmental policy, this note uses the example of a proposed carbon permit system to illustrate and discuss six different types of distributional effects: (1) higher prices of carbon-intensive products, (2) changes in relative returns to factors like labor, capital, and resources, (3) allocation of scarcity rents from a restricted number of permits, (4) distribution of the benefits from improvements in environmental quality, (5) temporary effects during the transition, and (6) capitalization of all those effects into prices of land, corporate stock, or house values. The note also discusses whether all six effects …
Fuel Versus Food, Ujjayant N. Chakravorty, Marie-Helene Hubert, Linda Nostbakken
Fuel Versus Food, Ujjayant N. Chakravorty, Marie-Helene Hubert, Linda Nostbakken
Ujjayant Chakravorty
Many countries have actively encouraged the production of biofuels as a low-carbon alternative to the use of fossil fuels in transportation. To what extent do these trends imply a reallocation of scarce land away from food to fuel production? This paper critically reviews the small but growing literature in this area. We find that an increase in biofuel production may have a significant effect on food prices and, in certain parts of the world, in speeding up deforestation through land conversion. However, more research needs to be done to examine the effect of newer generation biofuel technologies that are less …