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HEEP Faculty Fellow, James Stock, to Kickoff the Virtual Seminar on Climate Economics as First Presenter

HEEP Faculty Fellow, James Stock, to Kickoff the Virtual Seminar on Climate Economics as First Presenter

July 14, 2020

HEEP Faculty Fellow, James Stock, will be the first guest to present in the Virtual Seminar on Climate Economics, an online seminar hosted by the Federal Reserve Bank of San Francisco. Stock will be presenting his research on “The Macroeconomic Impact of Europe’s Carbon Taxes.” In addition to the Federal...

Read more about HEEP Faculty Fellow, James Stock, to Kickoff the Virtual Seminar on Climate Economics as First Presenter
Jacob Werksman

EC Climate Advisor Offers Insights on the European Green Deal, Green Recovery, and the Future of the Paris Agreement

July 14, 2020

Author: Doug Gavel

From his perspective as Principal Advisor to the Directorate General for Climate Action in the European Commission (EC), Jacob Werksman is cautiously optimistic about the direction of international climate policy. Werksman was the expert guest in the Conversations on Climate Change and Energy Policy webinar discussion last Thursday (July 9). The...

Read more about EC Climate Advisor Offers Insights on the European Green Deal, Green Recovery, and the Future of the Paris Agreement
Kelley Kizzier

Former EU Climate Lead Markets Negotiator Expresses Optimism for Future of the Paris Agreement and International Climate Policy in Newest Episode of “Environmental Insights”

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Learn about HEEP

HEEP is a university-wide initiative addressing today's complex environmental challenges and is based in the Harvard Kennedy School’s Mossavar-Rahmani Center for Business and Government. Learn more by reading director Robert Stavins' welcome message.

Environmental Insights Podcast

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Recent Publications

Metcalf, Gilbert, and James H. Stock. “Measuring the Macroeconomic Impact of Carbon Taxes.” Harvard Environmental Economics Program Discussion Paper Series (2020).Abstract
Economists have long argued that a carbon tax is a cost effective way to reduce greenhouse gas emissions. Increasingly, members of Congress agree. In 2019, seven carbon tax bills were filed in Congress (Kaufman et al., 2019). In addition, the Climate Leadership Council has built bipartisan support for a carbon tax and dividend plan (Baker et al., 2017). In contrast, the Trump Administration is retreating from any climate policy and has taken steps to withdraw from the Paris Accord, citing heavy economic costs to the U.S. economy from meeting the U.S. commitments made during the Obama Administration. In his June 1, 2017 statement on the Accord, for example, the President claimed that the cost to the economy would be “close to \$3 trillion in lost GDP and 6.5 million industrial jobs…” (Trump, 2017). What is the basis for claims about the economic impact of a carbon tax? Economic impacts of a carbon tax typically are estimated using computable general equilibrium (CGE) models (as was done for the report on which Trump based his claims). These models, while helpful, make many simplifying assumptions to remain tractable, including optimization, representative agents, and simplified expectations and dynamics, so at a minimum those estimates would ideally be complemented by empirical evidence on the macroeconomic effects of carbon taxes in practice. With carbon taxes in place in twenty-five countries around the world, including some dating to the early 1990s, empirical analysis of historical experience is now possible. This paper considers carbon taxes in Europe to estimate their impact on GDP and employment.
Sunstein, Cass R.Internalities, Externalities, and Fuel Economy.” Harvard Environmental Economics Program Discussion Paper Series (2020).Abstract
It is standard to think that corrective taxes, responding to externalities, are generally or always better than regulatory mandates, but in the face of behavioral market failures, that conclusion might not be right. Fuel economy and energy efficiency mandates are possible examples. Because such mandates might produce billions of dollars in annual consumer savings, they might have very high net benefits, complicating the choice between such mandates and externality-correcting taxes (such as carbon taxes). The net benefits of mandates that simultaneously reduce internalities and externalities might exceed the net benefits of taxes that reduce externalities alone, even if mandates turn out to be a highly inefficient way of reducing externalities. An important qualification is that corrective taxes might be designed to reduce both externalities and internalities, in which case they would almost certainly be preferable to a regulatory mandate.
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HPCA Conversations on Climate Change and Energy Policy

The Harvard Project on Climate Agreements is conducting a series of virtual forums addressing key issues in climate-change and related energy policy. Each forum will feature an expert guest and will be moderated by Robert Stavins, Director of the Harvard Project, or another Harvard faculty member. We hope you can join us!

Next Scheduled Event: 

Wednesday, August 19, 2020
9:00 – 10:00 am

Rachel Kyte

Rachel Kyte

"Using the Pandemic Recovery to Spur the Clean Transition —
Opportunities and Potential Pitfalls"

Registration is required. Please click here to register in advance for this webinar.

Rachel Kyte will discuss a potential green recovery from the pandemic — how recovery efforts might be leveraged to accelerate the transition to a clean and sustainable energy system — in the United States and globally. She is the Dean of The Fletcher School, Tufts University, and she has held senior positions in the World Bank and United Nations dealing with climate change and sustainability.

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