The selected article summaries for this quarter focused on carbon taxation and the natural capital of forests and their impacts. As always, the articles are selected from peer reviewed academic journals.  

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Castellanos, K. A., & Heutel, G. (2019, May 6). Unemployment, labor mobility, and climate policy. Journal of the Association of Environmental and Resource Economists Volume 11 Number 1, January 2024 JAERE https://www.journals.uchicago.edu/doi/full/10.1086/725482

Unemployment, Labor Mobility, and Climate Policy assesses the impact of a carbon tax on the economy. More specifically, this study looks at the relationship between a hypothetical carbon tax and employment in the United States through the usage of a mathematical economic model. For the purposes of the study, a $35 carbon tax was examined. The authors ran two scenarios, one with complete labor mobility and one without any mobility.

The results indicated that a $35 dollar carbon tax would have a minimal impact on aggregate employment (-0.18% with no labor mobility and -0.17% with labor mobility) in either scenario. However, once broken down by sector, sectors involved in the extraction of fossil fuels faced significant losses in employment. Meanwhile, sectors involved in the production of green energy benefited from the carbon tax – resulting in an increase in employment. To dampen these results, the authors recommend pairing a carbon tax with a distributional mechanism targeted towards communities that would be most adversely affected.

With carbon taxes becoming increasingly looked to as a potential solution to climate change, understanding its impact on employment will be critical for policymakers and the public going forward. 

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Grover, I., O’Reilly-Wapstra, J., Suitor, S., & Hatton MacDonald, D. (2023, June 22). Not seeing  the Accounts for the Forest: A systematic literature review of ecosystem accounting for forest resource management purposes. Ecological Economics. https://www.sciencedirect.com/science/article/pii/S0921800923001854 

This article is a  review of case studies that use the System of Economic Ecosystem Accounting (SEEA).  SEEA is only one approach to ecosystem accounting, which is an attempt to integrate physical accounts of natural capital with economic values. SEEA first arose out of concern that standard measures of economic prosperity ignored the role of natural capital and ecosystem services.  . The review identified a total of 35 empirical publications, and categorized them into the following global regions: Europe (43%), Asia (20%), America (14%), Africa (9%), Oceania (3%) and Europe/Asia (3%) as well as global scale assessments (8%) at regional (54%), country (23%) and multi-country (23%) levels. The largest percentage of publications covered forest specific ecosystems. Of these, a large portion focused on forest management and policy. The authors identified various gaps and challenges in how SEEA is applied, especially in countries lacking governmental and institutional support – arguably the regions that might benefit the most from a rigorous accounting of natural capital. The authors conclude with a call to make ecosystem accounting more widely available and accessible. 

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Zhao, J., Daigneault, A., Weiskittel, A., & Wei, X. (2023). Climate and socioeconomic impacts on Maine’s forests under alternative future pathways. Ecological Economics, 214, N.PAG. https://doi.org/10.1016/j.ecolecon.2023.107979

This article looks into the future of Maine’s forests under several “shared socioeconomic pathways,”* taking factors into account such as climate change and forestry management. The study integrated a harvest choice model with varying socioeconomic and climate change conditions to estimate the future of Maine’s forest sector under a range of possible scenarios. 

The results indicated that without increased rates of harvesting, forest ecosystems would grow by 144% on average over the next 80 years. It was found that climate change had a positive effect on forestry growth. In fact, forest growth was the highest under the highest emission scenario (164%). Economically, harvesting was expected to peak in 2060 in most scenarios, before declining at various rates up to 2100. Interestingly, the researchers found that socio-economic drivers had larger effects than climate change on timber harvest and carbon stocks.  

*The shared socioeconomic scenarios were developed by an international group of scientists and economists to map out potential futures, given certain assumptions about socio-economic responses to the “representative concentration pathways” (RCPs). The RCPs themselves were developed by an international group of researchers to describe different concentrations of greenhouse gasses in the atmosphere.