Evolutionary macroeconomic assessment of employment and innovation impacts of climate policy packages
Rengs, Bernhard (Austrian Academy of Sciences. Vienna Institute of Demography)
Scholz-Wäckerle, Manuel (Vienna University of Economics and Business. Department of Socioeconomics)
van den Bergh, Jeroen C. J. M. (Universitat Autònoma de Barcelona. Institut de Ciència i Tecnologia Ambientals)

Date:	2020
Abstract:	Climate policy has been mainly studied with economic models that assume representative, rational agents. Such policy aims, though, at changing carbon-intensive consumption and production patterns driven by bounded rationality and other-regarding preferences, such as status and imitation. To examine climate policy under such alternative behavioral assumptions, we develop a model tool by adapting an existing general-purpose macroeconomic multi-agent model. The resulting tool allows testing various climate policies in terms of combined climate and economic performance. The model is particularly suitable to address the distributional impacts of climate policies, not only because populations of many agents are included, but also as these are composed of different classes of households. The approach accounts for two types of innovations, which improve either the carbon or labor intensity of production. We simulate policy scenarios with distinct combinations of carbon taxation, a reduction of labor taxes, subsidies for green innovation, a price subsidy to consumers for less carbon-intensive products, and green government procurement. The results show pronounced differences with those obtained by rational-agent model studies. It turns out that a supply-oriented subsidy for green innovation, funded by the revenues of a carbon tax, results in a significant reduction of carbon emissions without causing negative effects on employment. On the contrary, demand-oriented subsidies for adopting greener technologies, funded in the same manner, result in either none or considerably less reduction of carbon emissions and may even lead to higher unemployment. Our study also contributes insight on a potential double dividend of shifting taxes from labor to carbon.
Grants:	European Commission 290647 European Commission 741087
Note:	Unidad de excelencia María de Maeztu CEX2019-000940-M
Rights:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, i la comunicació pública de l'obra, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original. No es permet la creació d'obres derivades.
Language:	Anglès
Document:	Article ; recerca ; Versió publicada
Subject:	Agent-based modeling ; Carbon tax ; Climate change ; Double dividend ; Environmental innovation ; Macroeconomics ; Social preferences ; SDG 1 - No Poverty ; SDG 7 - Affordable and Clean Energy ; SDG 8 - Decent Work and Economic Growth ; SDG 13 - Climate Action
Published in:	Journal of economic behavior & organization, Vol. 169 (January 2020) , p. 332-368, ISSN 0167-2681

DOI: 10.1016/j.jebo.2019.11.025

37 p, 3.9 MB

The record appears in these collections:
Research literature > UAB research groups literature > Research Centres and Groups (research output) > Experimental sciences > Institut de Ciència i Tecnologia Ambientals (ICTA) > Environmental and Climate Economics (ECE)
Articles > Research articles
Articles > Published articles