This paper analyses a natural experiment that illustrates the impact of raising energy prices to reduce greenhouse gas emissions on US economic growth. As a consequence of sharp reductions in the growth of fossil fuel combustion, there was no growth in carbon dioxide emissions between 1972 and 1987. These reductions resulted from dramatic increases in world petroleum prices in 1973-1974 and 1979-1980. Higher petroleum prices depressed the growth rate of the US economy and substantially reduced the output of the petroleum refining sector. Outputs of electric utilities, gas utilities, and chemicals industries were also adversely affected.
ASJC Scopus subject areas
- Economics and Econometrics