A Welfare Analysis of Policies Impacting Climate Change.

Résumé

What are the most effective ways to address climate change? This paper extends and applies the marginal value of public funds (MVPF) framework to help answer this question. We examine around 100 US environmental policy changes studied over the past 25 years. These policies span subsidies (wind, residential solar, electric and hybrid vehicles, vehicle replacement, appliance rebates, weatherization), nudges (marketing and energy conservation), and revenue raisers (fuel taxes, cap and trade). For each policy, we draw upon quasi-experimental or experimental evaluations of causal effects, and translate those estimates into an MVPF. We apply a consistent translation of these behavioral responses into measures of their associated externalities and valuations of those externalities. We also provide a new method for incorporating learning-by-doing spillovers. We then contrast the conclusions from the policy categories with those derived from more traditional cost per ton metrics used in previous literature.