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Manufacturing Employment

By  and Mark Curtis and Mark Curtis


This paper tests how a major cap-and-trade program, known as the NOx Budget Trading Program (NBP), affected employment in those regions where it was implemented. The cap-and-trade program dramatically decreased levels of NOx emissions and added substantial costs to energy producers. Using a triple-differences approach that takes advantage of the geographic and time variation of the program as well as variation in industry energy-intensity levels, I examine how employment changed in manufacturing industries whose production process requires high levels of energy. After accounting for a variety of flexible county and industry trends, I find that the NBP cap-and-trade program is responsible for the loss of approximately 82,000 jobs in the region where it was implemented. Additional evidence suggests this effect occurred partly through higher electricity prices

Year: 2013
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