Quotation Rengs, Bernhard, Scholz-Wäckerle, Manuel, van den Bergh, Jeroen. 2020. Evolutionary macroeconomic assessment of employment and innovation impacts of climate policy packages. Journal of Economic Behavior and Organization. 169 332-368.


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Abstract

Climate policy has been mainly studied with economic models that assume representative, rational agents. Such policy aims, though, at changing carbon-intensive consumption and production patterns driven by bounded rationality and other-regarding preferences, such as status and imitation. To examine climate policy under such alternative behavioral assumptions, we develop a model tool by adapting an existing general-purpose macroeconomic multi-agent model. The resulting tool allows testing various climate policies in terms of combined climate and economic performance. The model is particularly suitable to address the distributional impacts of climate policies, not only because populations of many agents are included, but also as these are composed of different classes of households. The approach accounts for two types of innovations, which improve either the carbon or labor intensity of production. We simulate policy scenarios with distinct combinations of carbon taxation, a reduction of labor taxes, subsidies for green innovation, a price subsidy to consumers for less carbon-intensive products, and green government procurement. The results show pronounced differences with those obtained by rational-agent model studies. It turns out that a supply-oriented subsidy for green innovation, funded by the revenues of a carbon tax, results in a significant reduction of carbon emissions without causing negative effects on employment. On the contrary, demand-oriented subsidies for adopting greener technologies, funded in the same manner, result in either none or considerably less reduction of carbon emissions and may even lead to higher unemployment. Our study also contributes insight on a potential double dividend of shifting taxes from labor to carbon.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Economic Behavior and Organization
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-A, VW-B, WH-A
Language English
Title Evolutionary macroeconomic assessment of employment and innovation impacts of climate policy packages
Volume 169
Year 2020
Page from 332
Page to 368
Reviewed? Y
DOI https://doi.org/10.1016/j.jebo.2019.11.025
Open Access Y
Open Access Link https://www.sciencedirect.com/science/article/pii/S0167268119303749?via%3Dihub#!

Associations

People
Scholz-Wäckerle, Manuel (Details)
External
Rengs, Bernhard (Wittgenstein Centre for Demography and Global Human Capital, Vienna Institute of Demography, Austrian Academy of Sciences, Austria)
van den Bergh, Jeroen (ICREA, Barcelona, Spain; Institute of Environmental Science and Technology, Universitat Autònoma de Barcelona; School of Business and Economics and Institut, Spain)
Organization
Department of Socioeconomics DP (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
1133 Computer-aided simulation (Details)
5325 Political economics (Details)
5334 Political economic policy (Details)
5335 Political economic theory (Details)
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