Paper Evaluates Effects of Climate Policy on Household and Regional Income
Rausch, S., et al. “Distributional Implications of Alternative U.S. Greenhouse Gas Control Measures,” National Bureau
of Economic Research, 2010, No. 16053.  In this EPRI-cosponsored working paper, the authors used MIT’s U.S. Regional Energy Policy model to analyze the economic and regional effects of different climate change policies.  The analysis showed that higher energy prices resulting from national cap-and-trade policies “would tend to be progressive” by
placing less burden on lower-income households and more on wealthier households.  This finding is strikingly different from those of previous studies—which focused only on uses of income and did not look at sources of income—that found proportional or regressive effects.  Results of the regional analysis found that states that depend heavily on fossil fuels for energy production or industry uses bear proportionately higher costs from climate policy.  For more information, contact Tom Wilson, (650) 855-7928, twilson@epri.com.