Each year, the Association of Environmental and Resource Economists (AERE) presents the Ralph C. d’Arge and Allen V. Kneese Awards to outstanding research papers published in the Journal of the Association of Environmental and Resource Economists during the calendar year. This year GRIPS Assistant Professor Akio Yamazaki’s paper, Comparing Applied General Equilibrium and Econometric Estimates of the Effect of an Environmental Policy Shock, was selected for honorable mention at the presentation of the awards at the ninth annual AERE summer conference on June 3, 2021.

This paper compares the employment effect of the British Columbia carbon tax using two empirical methods, a reduced-form econometric model and counterfactual simulations conducted using an applied general equilibrium (CGE) model. The comparison allows us to test the theory-driven predictions of the CGE model. It also allows us to test the identification strategy of our econometric model. Ex-post, we find statistically and economically significant effects on sectoral employment levels from the carbon tax – with employment falling in the most carbon-intensive sectors and rising in the least carbon-intensive. The CGE model predicts employment responses of very similar sign and magnitude to our econometric estimates.

Assistant Professor Yamazaki’s specialty is environmental economics. He received M.A in Economics from the University of Southern California and a Ph.D. in economics from the University of Calgary. He joined GRIPS in 2019. His current research interests are mitigation and adaptation issues related to climate change and global warming policy. Recently, he has given media statements on carbon pricing, a topic currently under discussion in Japan.

Details of the paper: https://www.journals.uchicago.edu/doi/10.1086/708734

Professor Yamazaki’s profile: https://www.grips.ac.jp/list/en/facultyinfo/yamazaki-akio/