Ambitious climate policy, coupled with financial frictions, has the potential to create macrofinancial stability risk. Such stability risk may expand beyond the economy implementing climate policy, potentially catching other countries off guard. International spillovers may occur because of...

A host of recent economic and sociological studies have documented the rising challenge of carbon inequality — that is, extreme class disparities in carbon emissions both within the United States and globally. These studies show an alarming divide, with the top 10% of emitters producing half...

Households use a variety of energy services by combining several sources of energy, such as electricity, gas, and kerosene. However, the effects of carbon taxes on the welfare of households using multiple energy sources have not yet been fully investigated. In this study, we propose a...

Current decarbonization policies neglect damages from local air pollutants. We analyze the tradeoff between complementary taxation of carbon emissions and local air pollution. We quantify results for the European power market until 2050. Taxing only air pollution results in social cost of 5,890...

This paper examines the role of environmental taxes in reducing air pollution. Using unique satellite data to observe area-wide levels of nitrogen dioxide (NO2), we leverage an emission tax introduction in 2013 in the Comunidad Valenciana. We find that this environmental tax reduced NO2 levels...

Airline fuel consumption is costly for the firms and for society as well due to a climate-change externality. We study how fuel price changes affect cost-minimizing choices by airlines that have implications for the extent of this externality. The airline industry's capital stock can be easily...