Wilcoxen paper on impact of climate policy published in BE Jour of Economic Analysis & Policy

Apr 4, 2011

The Distributional Impact of Climate Policy

Dale W. Jorgenson, Richard Goettle, Mun S. Ho, Daniel T. Slesnick & Peter J. Wilcoxen

The B.E. Journal of Economic Analysis & Policy, April 2011

Peter Wilcoxen

Public Administration & International Affairs Department

Center for Environmental Policy and Administration

Center for Policy Research

Climate Change

The B.E. Journal of Economic Analysis & Policy

Peter Wilcoxen

The purpose of this paper is to present a new methodology for evaluating the distributional impacts of climate policy. This methodology builds directly on the framework introduced by Jorgenson, Slesnick, and Wilcoxen (1992), but generalizes it by including leisure time, as well as goods and services, in the measure of household welfare.

The authors provide detailed results for 244 different types of households distinguished by demographic characteristics. In addition, they evaluate the overall impact of a cap-and-trade system, as represented in Energy Modeling Forum 22. While there is a wide range of outcomes for different demographic groups, the impact on economic welfare is regressive and generally negative but relatively small.