Diego R. Känzig
Assistant Professor in the Department of Economics at Northwestern University
bio
Diego is a former PhD Student in Economics at London Business School.
Diego’s research interests lie in empirical and quantitative macroeconomics, with a particular focus on the analysis of business cycles and macroeconomic policy.
Diego holds an MSc in International and Monetary Economics from the Universities of Bern and Basel and a BSc in Economics from the University of Bern. Prior to joining London Business School, he worked in the Inflation Forecasting Unit of the Swiss National Bank and as a Quantitative Analyst at Credit Suisse.
contacts
https://www.diegokaenzig.com/Publications
The Unequal Economic Consequences of Carbon Pricing
Abstract
This paper studies the economic impacts of carbon pricing. Exploiting institutional features of the European carbon market and high-frequency data, I document that a tighter carbon pricing regime leads to higher energy prices, lower emissions and more green innovation. This comes at the cost of a fall in economic activity, which is borne unequally across society: poorer households lower their consumption significantly while richer households are less affected. The poor are more exposed because of their higher energy share and, importantly, also experience a larger fall in income. Targeted fiscal policy can help alleviate these costs while maintaining emission reductions.
