Impact of Climate Policies on Occupations in the United States

Abstract

Climate policies benefit the environment, but they can also incur costs in the economy. This paper examines two climate policies, which are carbon tax and cap and trade, and focuses on the impact of carbon tax and cap and trade on occupations in the United States, since different states in the U.S. implement different climate policies. The study finds that carbon tax and cap and trade benefit green occupations, skilled occupations, and large-sized firms and damage non-green occupations, unskilled occupations, and small and middle-sized firms. By analyzing and comparing the employment rate of occupations in each category, this study determines that climate policies stifle occupations, but not all types of occupations, and when certain premises are met, carbon tax creates occupations. This research paper contributes to the literature by exploring the costs of carbon tax and cap and trade and helps the public to respond to environmental issues more effectively.