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Confronting the Climate Challenge - U.S. Policy Options (Hardcover)
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Confronting the Climate Challenge - U.S. Policy Options (Hardcover)
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Without significant reductions of greenhouse gas emissions, climate
change will cause substantial damage to the environment and the
economy. The scope of the threat demands a close look at the
policies capable of reducing the harm. Confronting the Climate
Challenge presents a unique framework for evaluating the impacts of
a range of U.S. climate-policy options, both for the economy
overall and for particular household groups, industries, and
regions. Lawrence Goulder and Marc Hafstead focus on four
alternative approaches for reducing carbon dioxide emissions: a
revenue-neutral carbon tax, a cap-and-trade program, a clean energy
standard, and an increase in the federal gasoline tax. They
demonstrate that these policies-if designed correctly-not only can
achieve emissions reductions at low cost but also can avoid placing
undesirable burdens on low-income household groups or especially
vulnerable industries. Goulder and Hafstead apply a multiperiod,
economy-wide general equilibrium model that is distinct in its
attention to investment dynamics and to interactions between
climate policy and the tax system. Exploiting the unique features
of the model, they contrast the shorter- and longer-term policy
impacts and focus on alternative ways of feeding back-or
"recycling"-policy-generated revenues to the private sector. Their
work shows how careful policy design, including the judicious use
of policy-generated revenues, can achieve desired reductions in
carbon dioxide emissions at low cost, avoid uneven impacts across
household income groups, and prevent losses of profit in the most
vulnerable U.S. industries. Despite dim prospects for climate
policy in the federal government, the urgency of the crisis demands
comprehensive action, and Confronting the Climate Challenge offers
a theoretically and empirically sound framework for doing so.
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