Stephie Fried will present the paper "The Macro Effects of Climate Policy Uncertainty."

Presenter: Stephie Fried is an assistant professor at Arizona State University and a senior economist at the Federal Reserve Bank of San Francisco. Her work focuses on the effects of climate change and climate policies on the macroeconomy.

Abstract: Uncertainty surrounding if and when the U.S. government will implement a federal climate policy introduces risk into the decision to invest in capital used in conjunction with fossil fuels. To quantify the macroeconomic impacts of this climate policy risk, we develop a dynamic, general equilibrium model that incorporates beliefs about future climate policy. We find that climate policy risk reduces carbon emissions by causing the capital stock to shrink and become relatively cleaner. Our results reveal, however, that a carbon tax could achieve the same reduction in emissions at less than half the cost.