Cap and trade climate policy and U.S. economic adjustments

摘要

The purpose of this exercise is to offer an economic analysis of some of the key policy provisions currently considered for dealing with climate change. The analysis is structured to highlight those empirical and design issues that most influence policy outcomes. The overall economic impacts from a modest initiative such as described here are estimated to be small. While the aggregate costs are small and readily absorbed, there are much larger impacts at the industry level. The energy sectors - coal mining, crude oil and gas extraction, petroleum refining and electric and gas utilities - are most affected. The declines in communications, finance and services sectors are minimal while agricultural and food processing outputs actually increase.