摘要：The most cost-effective policies for achieving CO2abatement (e.g., carbon taxes) are consideredpolitically unacceptable because of distributional consequences. This paper explores policies designed toaddress distributional concerns. Using an intertemporal, numerical general equilibrium model of theUnited States, we examine how efficiency costs change when CO2abatement policies include elementsthat neutralize adverse impacts on energy industries.We find that desirable distributional outcomes can be achieved at relatively low cost in terms ofefficiency. Without substantial added cost to the overall economy, the government can implement carbonabatement policies that protect profits and equity values in fossil-fuel industries. The key to thisconclusion is that CO2abatement policies have the potential to generate rents that are very large inrelation to the potential loss of profit. By enabling firms to retain only a very small fraction of thesepotential rents, the government can protect firms' profits and equity values. Consequently, thegovernment needs to grandfather only a small percentage of CO2emissions permits or, similarly, mustexempt only a small fraction of emissions from the base of a carbon tax. Each of these governmentpolicies involves only a small sacrifice of potential government revenue. Such revenue has an efficiencyvalue because it can be used to finance cuts in pre-existing distortionary taxes. Because these policiesgive up little of this potential revenue, they involve only a small sacrifice in terms of efficiency.We also find that there is a very large difference between preserving firms' profits and preservingtheir tax payments. Allowing firms to enjoy a dollar-for-dollar offset to their payments of carbon taxes—for example, through industry-specific cuts in corporate tax rates—substantially overcompensates firms,raising profits and equity values significantly relative to the unregulated situation. This reflects the factthat producers can shift onto consumers most of the burden from a carbon tax. The efficiency costs ofsuch policies are far greater than the costs of policies that do not overcompensate firms.
关键词：climate policy; distributional impacts; general equilibrium
