Working Paper: NBER ID: w24228
Authors: Eva Lyubich; Joseph S. Shapiro; Reed Walker
Abstract: This paper provides the first estimates of within-industry heterogeneity in energy and CO2 productivity for the entire U.S. manufacturing sector. We measure energy and CO2 productivity as output per dollar energy input or per ton CO2 emitted. Three findings emerge. First, within narrowly defined industries, heterogeneity in energy and CO2 productivity across plants is enormous. Second, heterogeneity in energy and CO2 productivity exceeds heterogeneity in most other productivity measures, like labor or total factor productivity. Third, heterogeneity in energy and CO2 productivity has important implications for environmental policies targeting industries rather than plants, including technology standards and carbon border adjustments.
Keywords: Environmental Policy; Firm Heterogeneity; Energy Productivity; CO2 Emissions
JEL Codes: F18; F64; H23; Q56
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Heterogeneity in energy and CO2 productivity across plants (D29) | Differences in emissions rates (Q52) |
| Differences in emissions rates (Q52) | Effectiveness of environmental regulations (Q52) |
| Heterogeneity in energy and CO2 productivity (O49) | Effectiveness of industry-level regulations (L51) |
| Misalignment between regulation and plant-level productivity (L59) | Inefficiencies in environmental policy (Q58) |
| Energy productivity heterogeneity (D29) | Appropriateness of uniform industry-level regulations (L59) |