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- W3124593662 abstract "This paper develops a method for forecasting the marginal abatement cost (MAC) of climate policy using three features of the failed Waxman-Markey bill. First, the MAC is revealed by the price of traded permits. Second, the permit price is estimated using a regression discontinuity design (RDD) comparing stock returns of firms on either side of the policy’s free permit cutoff rule. Third, because Waxman-Markey was never implemented, I extend the RDD approach to incorporate prediction market prices which normalize estimates by policy realization probabilities. A final bounding analysis recovers a MAC range of $5 to $19 per ton CO2e.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org." @default.
- W3124593662 created "2021-02-01" @default.
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- W3124593662 date "2016-05-01" @default.
- W3124593662 modified "2023-09-26" @default.
- W3124593662 title "Using a Free Permit Rule to Forecast the Marginal Abatement Cost of Proposed Climate Policy" @default.
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