Working Paper: NBER ID: w30956
Authors: Timothy Fitzgerald; Casey B. Mulligan
Abstract: Advocates in several countries have promoted a “green recovery” from the pandemic, with an emphasis on measures to address climate objectives. We evaluate proposals for the United States and find that as stated, ambitious plans to further cut emissions from transportation and electricity will require more inputs to produce the same outputs, resulting in recurring costs of up to $483 billion per year. We forecast that real GDP and consumption will be 2-3 percent less in the long run if policies are implemented as stated, underscoring the opportunity costs of achieving green objectives when resources might be more efficiently deployed.
Keywords: No keywords provided
JEL Codes: Q40; Q48; Q54; Q58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Green Recovery Plans (Q55) | Increased Resource Costs (Q21) |
| Increased Resource Costs (Q21) | Lower GDP and Consumption (E20) |
| Higher Energy and Climate Policy Costs (Q48) | Opportunity Costs (D61) |
| Biden Plan (E65) | Increased Resource Costs (Q21) |
| Stricter Fuel Economy Standards (R48) | Higher Vehicle Costs (R48) |
| Higher Vehicle Costs (R48) | Reduced Number of Vehicles Sold (L81) |
| Renewable Energy Policies (Q48) | Increased Costs (D49) |