“To Price or Subsidize: Climate Policy with Labor Market Frictions" (available here).
Assuming full employment, a Pigouvian carbon price is more cost-effective than a green subsidy at addressing a climate externality. This paper asks whether a carbon price remains more cost-effective if labor market search frictions give rise to unemployment. I develop a labor search model with an empirical foundation for the frictions workers face when reallocating to green, fossil, and all remaining “neutral” jobs. I find that green subsidies financed in a non-distortionary manner increase employment and that the employment gains make green subsidies more cost-effective than carbon pricing at modest abatement levels. An implication is that appropriately financed green subsidies can serve as a cost-effective alternative to carbon pricing when emission reductions are small.
“Temperature Anomalies and Carbon Pricing Support: Evidence from a National Referendum”, with L. Barrage, Trinity Economics Papers, tep1326, 2026.
What drives voter decisions on carbon pricing? Analyzing Switzerland’s 2021 CO2 Act referendum, this paper finds that support was substantially higher in municipalities experiencing unusually warm weather during the voting period. This effect is most robust relative to a recent temperature baseline, consistent with a “frog in hot water” effect. Opposition was stronger in areas with higher correlates of policy costs, such as car ownership and manufacturing employment. Evidence on long-run temperature trends is mixed. These findings suggest that future weather anomalies may increase electoral support for carbon pricing.
“Distributional and Efficiency Impacts of Supranational Carbon Budget Allocations”, with F. Landis and S. Rausch, Energy Economics, forthcoming.
“Between- and within-country distributional impacts from harmonizing carbon prices in the EU”, with F. Landis and S. Rausch, Energy Economics, 103, 2021.
“Assessing the Distributional Effects of the European Green Deal”, with G. Zachmann, CESifo Forum, 22, 2021.
“Estimating the cost of capital for wind energy investments in Turkey”, with S. Tagliapietra and G. Zachmann, Energy Policy, 131, 2019.
“The EU response to US trade tariffs”, with M. Demertzis, Intereconomics – Review of European Economic Policy, 53, 2018.
“The distributional effects of climate policies”, with G. Zachmann, in: The European Energy Transition: Actors, Factors, Sectors, S. Nies. (Ed.), Deventer: Claeys & Casteels Law Publishing, 75-91, 2019.
“Unemployment and Welfare from Climate Policy”, with J. Abrell and S. Rausch
“What is a green job, and why it matters” (working title), with A. Garnero and A. Terzi
“Let’s pay more attention to the co-benefits of Switzerland’s decarbonization targets”, with M. Filippini, F. Landis, and J. Savelsberg, Energy Blog at ETH Zurich, 2021.
“The distributional effects of climate policies”, with G. Zachmann and G. Claeys, Bruegel Blueprint Series, 2018.
“Still on the road? Assessing Trump’s threat to European cars”, with A. Roth and S. Tagliapietra, Bruegel Blog Post, 2018.
“Is the European automotive industry ready for the global electric vehicle revolution?”, with A. Roth, S. Tagliapietra, and R. Veugelers, Bruegel Policy Contribution, 2018.
“The Impact of Brexit on the EU Energy System”, with A. Roth, S. Tagliapietra, and G. Zachmann, European Parliament, 2017.