A broad consensus exists that carbon pricing is key for cost-effective emission reductions and that it must play a major role in driving the transition to a climate-neutral economy. However, despite significant progress in wider climate policy uptake in recent years, the vast majority of...

This report provides an overview of the main outputs of the research project Influence of market structures and market regulation on the carbon market (2018-2021). The aim of the project, commissioned by the German Environment Agency, was to gain a better understanding of the impact of market...

Many distributional analyses of carbon pricing focus on the uses-side incidence of carbon pricing. This is the differential burden resulting from heterogeneity in consumption across households. Once one allows for sources-side incidence (i.e. differential impacts of changes in real factor...

We analyze the distributional and efficiency impacts of different allowance allocation schemes for a national cap and trade system using the USREP model, a new recursive dynamic computable general equilibrium model of the U.S. economy. We consider allocation schemes applied to a comprehensive...

I conclude with some observations on the use of price-based instruments. In particular I discuss how a carbon tax could be designed to achieve environmental goals of emission caps over a control period

Tax expenditures are a major source of support for energy related activities in the federal budget exceeding direct budget support for energy by a factor of nearly six. Focusing on the policy goals of reducing greenhouse gas emissions and petroleum consumption, I find these tax expenditures...

The MIT Emissions Prediction and Policy Analysis model is applied to synthetic policies that match key attributes of a set of cap-and-trade proposals being considered by the U.S. Congress in spring 2007. The bills fall into two groups: one specifies emissions reductions of 50% to 80% below 1990...

We analyze the quantitative labor market and aggregate effects of a carbon tax in a framework with pollution externalities and equilibrium unemployment. Our model incorporates endogenous labor force participation and two margins of adjustment influenced by carbon taxes: (1) firm creation and (2)...

Many policies to limit greenhouse gas emissions have at their core efforts to put a price on carbon emissions. Carbon pricing impacts households both by raising the cost of carbon intensive products and by changing factor prices. A complete analysis requires taking both effects into account. The...

The effectiveness of carbon pricing as a market-based policy tool with economy-wide transformation potential has increasingly rendered it the instrument of choice among policy makers responding to challenges posed by climate change. However, the potential for jurisdictions to introduce carbon...