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Geographical Disparities in Carbon Emissions and Political Leanings Assessed in New Analysis Highlights Challenges of Implementing National Climate Change Regulation

Posted on: Tuesday, 19 May 2009, 09:40 CDT

CAMBRIDGE, Mass., May 19 /PRNewswire/ -- In a report released Friday by the National Bureau of Economic Research, economist Michael Cragg of The Brattle Group and professor Matthew E. Kahn of the UCLA Institute of the Environment analyze how, absent mitigation, regulation for reducing greenhouse gas emissions will impose extremely different per capita costs across geographical regions in the United States. The study documents the resulting challenges faced by the Obama Administration in passing climate legislation and demonstrates an important set of constraints for economists to consider when making policy evaluations or recommendations.

The report, "Carbon Geography: The Political Economy of Congressional Support for Legislation Intended to Mitigate Greenhouse Gas Production," utilizes several independent data sets to compare the geography of carbon emissions across the U.S. to the geography of voting patterns on recent congressional legislation intended to address climate change. The report uncovers three key facts, which will likely play an important role in constraining climate legislation:

1. Low-carbon, environmentalist states, such as California, would bear less of the incidence of climate change regulation than high-carbon Midwestern states. The differences are quite pronounced, with high-carbon regions emitting five times the amount of carbon than low-carbon areas. Many of the carbon-intensive states are also rural, more politically conservative, and less affluent than the low-carbon regions, which are typically coastal, urban areas.
2. Based on past voting records for environmental policies, representatives from states or counties where per capita carbon emissions are higher are likely to vote against climate change mitigation legislation; representatives whose districts are wealthier and less carbon-intensive are likely to vote for climate change mitigation legislation.
3. In the 111th Congress, the Energy and Commerce Committee consists mostly of members who represent high-carbon districts. These geographical facts suggest that the Obama Administration and the Waxman Committee will face distributional challenges in building a majority voting coalition in favor of internalizing the carbon externality.

The findings of this report have direct implications on the need for a climate policy that controls carbon emissions while addressing the distributional effects across space of new carbon regulation. It is a political necessity that any climate legislation be designed to in some way compensate those states that will bear the higher costs.

"We anticipate that our analysis will motivate economists to consider the theory of the second-best in helping to design policies to tackle carbon emissions. They must also take into account the constraints imposed by the existing carbon emitting infrastructure," noted Dr. Cragg.

The report can be found on the National Bureau of Economic Research's website at http://www.nber.org/papers/w14963 or at www.brattle.com.

The Brattle Group provides consulting and expert testimony in economics and finance to corporations, law firms, and public agencies worldwide. Areas of expertise include utility and regulatory planning, antitrust and competition, and valuation and damages. For more information, please visit www.brattle.com.

The UCLA Institute of the Environment generates knowledge and provides solutions for regional and global environmental problems, and educates the next generation of professional leadership committed to the health of the planet. For more information, please visit http://www.ioe.ucla.edu/about/.

SOURCE The Brattle Group

Source: PR Newswire

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