NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Competitiveness Impacts of Climate Change Mitigation Policies

Joseph E. Aldy, William A. Pizer

NBER Working Paper No. 17705
Issued in December 2011
NBER Program(s):   EEE   ITI

In order to clarify ongoing debates over the competitiveness impacts of climate change regulation, we develop a precise definition that can be estimated with available domestic production, trade, and energy price data. We use this definition and a 20+ year panel of 400+ U.S. manufacturing industries to estimate and predict the effects a U.S.-only $15 per ton CO2 price. We find competitiveness effects on the order of a 1.0 to 1.3 percent decline in production among energy-intensive manufacturing industries, representing about one-third of the policy’s impacts on these firms’ output.

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Document Object Identifier (DOI): 10.3386/w17705

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