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32. Real Effects of Climate Policy: Financial Constraints and Spillovers
- Author:
- Söhnke M. Bartram
- Publication Date:
- 04-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Climate change is among the most intensely debated socioeconomic issues of current times. As a response to potential catastrophic risks from climate change, governments around the world are pushing for various regulations to curb greenhouse gas emissions. However, there is far from a consensus on optimal policy approaches, and as a result, climate policies are highly fragmented across the jurisdictions in which they are designed and implemented. More importantly, it is unknown whether such localized yet uncoordinated policies are able to internalize potential externalities that may impede efforts to address climate change as a global phenomenon or simply distort allocations in the economy. For example, at the beginning of 2013, California became the first and only state to put a comprehensive mandatory carbon regulation in place in the form of a cap‐and‐trade system that applies universally to all industrial greenhouse gas emissions. Exploiting the introduction of the California cap‐and‐trade rule, we investigate the internal resource‐allocation responses by firms and the real but unintended spillover effects of localized climate policies that arise from the importance of financial constraints. Our study analyzes the interplay between climate policy and firm behavior, and it informs policymakers regarding the effectiveness of climate regulation.
- Topic:
- Climate Change, Regulation, Economy, Business, and Carbon Emissions
- Political Geography:
- Global Focus
33. Slippery Fish: Enforcing Regulation under Subversive Adaptation
- Author:
- Andres Gonzalez-Lira
- Publication Date:
- 04-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Correcting market failures and improving economic efficiency often require curbing undesirable behaviors of market agents who act to maximize their private benefits. Examples include actions that affect ecosystems, such as deforestation, pollution, and overexploitation of natural resources; actions that affect community health, such as drunk driving and open defecation; or actions that undermine government performance, such as corruption and tax evasion. Enacting and enforcing regulations is the most direct strategy to deter such behaviors. Implementing this strategy requires strong institutions to enforce laws, plus sophisticated policing to track agents’ reactions to enforcement so that rules are robust enough to curb the undesirable behavior even when regulated agents try to game the new system.
- Topic:
- Environment, Government, Markets, Regulation, and Adaptation
- Political Geography:
- Global Focus
34. Policy Experimentation in China: The Political Economy of Policy Learning
- Author:
- Shaoda Wang and David Y. Yang
- Publication Date:
- 05-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Determining what policies to implement and how to implement them is an essential government task. Policy learning is challenging, as policy effectiveness often hinges on the nature of the policy, its implementation, the degree that it is tailored to local conditions, and the efforts and incentives of local politicians to make the policy work.
- Topic:
- Political Economy, Politics, Policy Implementation, and Economic Policy
- Political Geography:
- China and Asia
35. The Regulatory Costs of Being Public
- Author:
- Michael Ewens, Kairong Xiao, and Ting Xu
- Publication Date:
- 05-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- An important explanation for the significant decline in the number of publicly listed companies in the United States is the increased burden of disclosure and governance regulations. Indeed, practitioners often point to heightened regulatory costs as the culprit of the disappearing public firms, while major deregulations such as the 2012 Jumpstart Our Business Startups (JOBS) Act were directly motivated by perceived costs of being public. Thus, understanding the role of regulations in the cost of being public and the decline in the number of public firms can address concerns about possible capital market dysfunction.
- Topic:
- Markets, Governance, Regulation, and Business
- Political Geography:
- North America and United States of America
36. Evidence of the Unintended Labor Scheduling Implications of the Minimum Wage
- Author:
- Qiuping Yu, Shawn Mankad, and Masha Shunko
- Publication Date:
- 06-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- The effect of the minimum wage has been an important topic of debate for decades. For many years, low‐wage laborers, especially in the food service and retail sectors in the United States, have been advocating an increase in the minimum wage to $15. Intending to increase worker welfare, many states (e.g., California and New York) and municipalities (San Francisco, Seattle, and New York City) have responded by raising their minimum wages.
- Topic:
- Labor Issues, Economic Policy, and Minimum Wage
- Political Geography:
- North America and United States of America
37. Who Pays Sin Taxes? Understanding the Overlapping Burdens of Corrective Taxes
- Author:
- Christopher Conlon, Nirupama Rao, and Yinan Wang
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- “Sin taxes”—or excise taxes on particular goods that society deems harmful—are popular in the United States. Federal, state, and local governments levy taxes on alcohol and tobacco with the dual and sometimes conflicting goals of curbing consumption and raising revenue. For many of these products, taxes represent a large share of the overall price. In New York City, a 1.75L bottle of vodka might sell for as little as $11.99 of which $7.97 is tax; and a $13.00 pack of cigarettes includes $6.86 in taxes.
- Topic:
- Tax Systems, Economic Policy, and Consumer Behavior
- Political Geography:
- North America and United States of America
38. The Welfare Effects of Time Reallocation: Evidence from Daylight Saving Time
- Author:
- Joan Costa-i-Font, Sarah Fleche, and Ricardo Pagan
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- More than 70 countries around the world currently observe daylight saving time (DST) to reduce energy demand. However, recent studies have shown that DST does not save energy and may actually increase electricity consumption. Furthermore, opponents of DST argue that even a one‐hour time change can have long‐term consequences for individuals. DST transition has been linked to increased risks of car accidents, heart attacks, and depressive symptoms in studies. According to our findings, the spring DST transition has a negative impact on individuals’ welfare, specifically a decrease in life satisfaction. Investigating a broad range of outcomes, we show that this decline in life satisfaction can be explained by a decrease in sleep following the transition and an increase in time pressure, which significantly affect individuals’ physical and emotional health in subsequent days.
- Topic:
- Economic Policy, Time, Well-Being, and Daylight Saving Time
- Political Geography:
- Global Focus
39. Welfare Implications of Electric Bike Subsidies: Evidence from Sweden
- Author:
- Anders Anderson and Harrison Hong
- Publication Date:
- 08-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Greenhouse gas emissions from U.S. transportation account for about 29 percent of total U.S. greenhouse gas emissions, making it the largest contributor by sector to global warming in the United States. Within the U.S. transportation sector, cars are responsible for 58 percent of all transportation emissions according to the Environmental Protection Agency. Along with electric cars, electric bikes (also known as pedelecs or e‑bikes) are a potentially important tool to address global warming. With rechargeable batteries, they are capable of long distances and hence can replace car trips for work in dense and growing urban areas around the world.
- Topic:
- Climate Change, Welfare, Transportation, and Subsidies
- Political Geography:
- Europe and Sweden
40. Jawboning against Speech: How Government Bullying Shapes the Rules of Social Media
- Author:
- Will Duffield
- Publication Date:
- 09-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Over the past two decades, social media has drastically reduced the cost of speaking, allowing users the world over to publish with the push of a button. This amazing capability is limited by the fact that speakers do not own the platforms they increasingly rely on. If access to the platforms is withdrawn, speakers lose the reach that social media grants. In America, government censorship is limited by the First Amendment. Nevertheless, seizing upon the relationship between platforms and speakers, government officials increasingly demand that platforms refrain from publishing disfavored speech. They threaten platforms with punitive legislation, antitrust investigations, and prosecution. Government officials can use informal pressure — bullying, threatening, and cajoling — to sway the decisions of private platforms and limit the publication of disfavored speech. The use of this informal pressure, known as jawboning, is growing. Left unchecked, it threatens to become normalized as an extraconstitutional method of speech regulation. While courts have censured jawboning in other contexts, existing judicial remedies struggle to address social media jawboning. Amid the opacity and scale of social media moderation, government influence is difficult to detect or prevent. Ultimately, congressional rulemaking and the people’s selection of liberal, temperate officials remain the only reliable checks on this novel threat to free speech.
- Topic:
- Government, Regulation, Social Media, Censorship, and Free Speech
- Political Geography:
- Global Focus and United States of America