March 2021

The Macro Effects of Local climate Protection Uncertainty

Stephie Fried, Kevin Novan, William B. Peterman

Abstract:

Uncertainty surrounding if and when the U.S. executive will implement a federal local climate protection introduces risk into the choice to make investments in capital inclined along sms lån på minuttet fossil fuels. To quantify the macroeconomic impacts of this local climate protection risk, we manufacture a dynamic, general equilibrium mannequin that incorporates beliefs about future local climate protection. We discover that local climate protection risk reduces carbon emissions by causing the capital stock to shrink and change into comparatively cleaner. Our outcomes demonstrate, nonetheless, that a carbon tax could presumably perchance presumably scheme the an identical reduction in emissions at now no longer up to half the designate.

DOI: https://doi.org/10.17016/FEDS.2021.018

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Last Update:
March 19, 2021

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