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And if anything, California's efforts to increase EV adoption reduce the pain of high gasoline prices. When EVs are widely available, households are more able to substitute away from gasoline usage during moments like this. And California has the highest per capita adoption of EVs. /n

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Furthermore, California's gasoline prices are rising similarly to that of other U.S. regions, as shown in the plot below. This counters arguments that California's policies such as cap-and-invest are worsening the gas price impact of the Iran bombings. 3/

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Let's get the causality and economics of this straight. The higher gas prices we're seeing is driven by the Iran bombings. That is a global supply shock that has nothing to do with California's cap-and-invest program. 2/

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Fuel, energy prices raise the pressure as California officials take next steps on climate

There's some misguided messaging out there in California trying to take advantage of high gas prices from the Iran bombings and CARB's cap-and-invest rule making. Some are using this moment of high gas prices to delay CARB's cap-and-invest rule making. 1/

latimes.com

A plan to strengthen California's climate program faces pushback as industry groups and some lawmakers warn the changes could drive up already-high energy costs.

Kyle Meng @kylemeng.com · 12/02/2026

So much coverage on the EPA endangerment repeal but has anyone actually seen the final rule? Not on WH, EPA, or Federal Register sites. Where is this actual repeal?

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Kyle Meng @kylemeng.com · 28/01/2026

My commentary for @csis.org on the U.S. Clean Competition Act. It covers where CCA situates in the geopolitical/climate landscape and our @emlab.ucsb.edu modeling of CCA's U.S. & global economic and climate impacts. emLab policy brief: linkly.link/2YlqQ emLab executive summary: linkly.link/2YlqB

csis.org

Can the 2025 Clean Competition Act Cut Global Emissions and Maintain U.S. Competitiveness?

The 2025 U.S. Clean Competition Act addresses the twin challenges of maintaining U.S. industrial competitiveness and accelerating industrial decarbonization by pairing a domestic performance fee with ...

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https://linkly.link/2YlqQ

In summary: -CCA lowers emissions and raises U.S. revenue -A domestic performance fee is critical to CCA beneﬁts -CCA’s climate club provisions amplify global emissions reductions Full policy brief and appendix: linkly.link/2YlqQ Executive Summary: linkly.link/2YlqB /n

linkly.link

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Our results also suggest that sequencing a carbon tariff first before a domestic performance fee may be ineffective. Once a carbon tariff is adopted, a domestic fee lowers output relative to the tariff, making the domestic fee less attractive. This amounts to granting the carrot before the stick. 7/

RESULT 3: CCA climate clubs magnify global emissions reductions. For example, when clubs require domestic policies, global CITE emissions decrease by 24.2% in an OECD+Brazil+China+Indonesia+India club. Without domestic policies, the same club decreases global CITE emissions by 1.2%. 6/

RESULT 2: If CCA were implemented as a carbon tariff without a domestic performance fee, U.S. GHG emissions rise and emissions abroad fall. Without a domestic performance fee, CCA cut global GHGs by two-thirds as much, raise one-third the revenue, and deliver smaller U.S. GDP & welfare gains. 5/

Result 1: CCA lowers U.S. CITE emissions by 8%. CCA lowers global CITE emissions by 44.9 mtons, 16.3 mtons from U.S. and 28.6 mtons from abroad. It raises $10.6B in revenue annually. While CITE output is slightly lower, CCA has essentially no effect on U.S. GDP. If anything, GDP rises slightly. 4/

Greg Casey (Williams), Ivan Rudik (Cornell) and I use a general-equilibrium global trade model custom-built for climate and trade policies to analyze CCA’s U.S. and global economic and climate impacts. Here are key results. 3/

CCA pairs a U.S. domestic carbon performance fee applied to dirtier-than-average U.S. firms with a carbon import tariff in carbon-intensive, trade-exposed (CITE) sectors. It also has climate club provisions that waive carbon tariffs for trade partners with comparable domestic climate policies. 2/

https://linkly.link/2YlqQ

In our geopolitical turmoil, here’s an example where trade can constructively advance U.S. & global interests. Last month, Congress introduced the Clean Competition Act to further decarbonization & maintain U.S. competitiveness. Today, we at @emlab.ucsb.edu release modeling of CCA impacts. 1/

linkly.link

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Kyle Meng @kylemeng.com · 13/01/2026

If you you miss reading a proper cost-benefit analysis of environmental policy, one that fully accounts for costs AND benefits, here's California CARB's proposed GHG cap-and-invest regulations, dropped at noon. No "we won't value public health benefits just because they're uncertain" shenanigans.

ww2.arb.ca.gov

Cap-and-Invest Regulation | California Air Resources Board

Proposed 2026 Amendments to the Cap-and-Invest (formerly Cap-and-Trade) Regulation The preliminary documents posted below have been submitted to the Office of Administrative Law (OAL) and may be modif...

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Kyle Meng @kylemeng.com · 12/01/2026

And it obviates the very reason why the EPA even exists, which is to balance the public health benefits and compliance costs of U.S. environmental policies. Why do anything to clean up the environment if one assumes there are no benefits? /n

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Kyle Meng @kylemeng.com · 12/01/2026

This runs counter to how cost-benefit analyses have been conducted by the U.S. government for decades, across both Republican and Democratic administrations. 2/

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Kyle Meng @kylemeng.com · 12/01/2026

Human health benefits are by far the largest benefit from most environmental regulations. By not monetizing these benefits moving forward, the Trump EPA is essentially saying there are no human health benefits to reducing air/toxic/climate pollution, improving drinking water quality, etc. 1/

nytimes.com

E.P.A. to Stop Considering Lives Saved When Setting Rules on Air Pollution

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Stay tuned in the coming weeks as we apply this model to analyze CCA’s impacts on U.S. competitiveness, GHG emissions, GDP, and government revenue, as well as the impacts on our trading partners. /n

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My team at @emlab.ucsb.edu has been building a state-of-the-art global computable general equilibrium (CGE) trade model to evaluate the economic and climate implications—both for the U.S. and globally—of paired domestic and trade climate policies like CCA. 8/

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Together, these three pillars provide a comprehensive system of carrots and sticks for both domestic and foreign producers. CCA recognizes the challenges of domestic industrial decarbonization and the geopolitical opportunities of trade agreements. 7/

Pillar #3: Domestic decarbonization investments CCA returns revenue from the domestic performance fee & carbon import tariffs through grants, loans, & rebates to accelerate US industrial decarbonization. In this era of budget deficits, CCA provides climate spending in a budget-neutral package. 6/

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Importantly, CCA waives the US carbon tariff if a trade partner adopts comparable domestic climate policy. This is crucial, as it lays the groundwork for a US-led global climate club: a trade agreement that rewards domestic climate action with market access. 5/

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Pillar #2: Carbon import tariff with climate club provisions US decarbonization is of little use if the rest of the world doesn’t also act. To level playing field, CCA imposes a carbon tariff on imports from countries that are dirtier on average than the U.S., at the same $60/ton CO2e rate. 4/

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Pillar #1: Domestic performance fee CCA applies a performance fee of $60/ton CO2e to U.S. firms that are dirtier than U.S. average. Firms that are cleaner than average face no fee. This creates an incentive for dirtier firms to clean up, and for cleaner firms to stay ahead. 3/

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Manufacturing is where climate policy meets global competition. In some sectors, US is among cleanest (eg metals). In others US is falling behind (eg EVs, renewables). CCA aims for US industries to be globally competitive while achieving GHG cuts at home and abroad through 3 pillars. 2/

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Whitehouse, DelBene Reintroduce Carbon Border Adjustment to Boost Domestic Manufacturers, Tackle Climate Change

Sen. Whitehouse, Rep. DelBene, & co-sponsors just introduced a revamped Clean Competition Act (CCA). CCA is the most ambitious & meticulously crafted climate policy from this Congress. It lays a marker for what US policy looks like in this era of geopolitical competition. 1/ #climatesky #energysky

epw.senate.gov

Clean Competition Act bolsters American companies’ competitiveness and cuts emissions at home and abroad Washington, D.C. - Senator Whitehouse (D-RI), Ranking Member of the Senate Committee on E...

Our "Dodging Day Zero" paper is out in JEEA. We uncover how Cape Town avoided 2017's catastrophic drought. But in doing so, created longer term sustainability challenges and weakened the fiscal viability of public water. A lesson for the 1B living in drought vulnerable cities. #climatesky #econsky

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Shu-Chen TsaoPh.D. Candidate in EconomicsUniversity of California, Santa Barbara (UCSB)

Shu-Chen Tsao JMP: "Innovation and Adaptation to Expanding Biological Threats" Website: sites.google.com/view/shuchen...

sites.google.com

Shu-Chen Tsao

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Jimena Rico-Straffon JMP: "Impacts of Water Shortages on Labor Supply: Evidence from Mexico City" Website: jimenaricostraffon.com

jimenaricostraffon.com

Jimena Rico-Straffon

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Personal Website of Risa Lewis

Risa Lewis JMP: "Willingness to Pay to Avoid the Emotional Well-being Impact of Climate Change Information" Website: risaalewis.com

risaalewis.com

Risa Lewis

Minwoo Hyun's Personal Website

Minwoo Hyun JMP: “Trapped or Transferred: Worker Mobility and Labor Market Power in the Energy Transition” Website: minwoo-hyun.github.io

minwoo-hyun.github.io

Welcome to Yang Gao's academic homepage.

Yang Gao JMP: "Beyond Emissions: The Implications of Capital Misallocation on Optimal Carbon Tax" Website: yanggaolamb.github.io

yanggaolamb.github.io

Yang Gao - Homepage

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Contact 3017 North Hall University of California Santa Barbara, CA 93106 lbian at ucsb dot edu

Luorao Bian JMP: “The Environmental Implications of Place-Based Policy: Evidence from Minimum Wage Ordinances” Website: www.luoraobian.com

luoraobian.com

Home

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Kyle Meng @kylemeng.com · 19/09/2025

Our PhD job market candidates continues UCSB’s proud tradition in environmental and resource economics. Here are our students on the market this year (in alphabetical order). #econsky

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Governor Newsom just reauthorized California’s centerpiece climate policy - cap and invest - for the next two decades, reducing pollution and electricity prices in the world’s 4th biggest economy. This is now the US’ most important climate policy.

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Kyle Meng @kylemeng.com · 13/09/2025

California Assembly and Senate just passed AB 1207, extending and strengthening the state’s centerpiece climate policy - cap and invest- for the next 20 years. Now onto the governor’s signature! #climatesky #energysky

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Kyle Meng @kylemeng.com · 12/09/2025

Without GHGRP, we are blind to what's happening to US GHG emissions. #climatesky #energysky

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Kyle Meng @kylemeng.com · 12/09/2025

Dr. Kyle Meng, UC Santa Barbara: “This is the most important U.S. climate policy for the foreseeable future. These bills send a signal that California is doubling down on its climate commitments for the next two decades with a practical approach that meets both climate and affordability goals.”

gov.ca.gov

What they’re saying: Overwhelming support for historic climate and energy affordability legislation | Governor of California

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Reposted by Kyle Meng

Tatyana Deryugina @tderyugina.bsky.social · 11/09/2025

Hey, #EconSky! Got a policy-relevant paper that you want folks in DC to see? Present & publish it with NBER's Environmental and Energy Policy and the Economy. Submission deadline is Oct 20. Conference is in DC on May 21, 2026. More details below. conference.nber.org/confsubmit/b...

conference.nber.org

Submission: 8th Annual NBER Environmental and Energy Policy and the Economy Conference, Page 1 of 2 - MyNBER

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Many thanks to Gov. Newsom, CA legislators, & staff for their tireless efforts to get us here. Mighty proud to be a Californian today. /n

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This is a strong bill. It double downs on CA’s climate commitment for next 20 years—balancing ambition & affordability. It may also well be the most important U.S. climate policy for the foreseeable future. 9/

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5. Tackling leakage  Previously, free permits granted regardless of industry’s leakage risk.  But too many free permits mean less revenue.   Now, post-2030 free allocations must consider each sector’s leakage risk. 8/

4. Smarter offsets  Offsets lower costs but raise integrity concerns.  AB 1207 has a new idea: for every offset used, the cap tightens.  Emissions stay under the cap and compliance costs fall vs. banning offsets outright. 7/

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3. Making electricity more affordable   Electricity in CA is too costly, slowing electrification and making adaptation expensive.   AB 1207 directs more revenue to the CA Climate Credit, boosting bill relief, especially during hot months when families need it most. 6/

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2. Explicit link to CA climate targets  For the first time, CA carbon market is explicitly tied to CA GHG goals: -40% cut by 2030 (vs 1990) -85% cut (vs 1990) & net-zero by 2045 This means financial consequences if CA fall short 5/

1. Extension to 2045  Past renewals every 10 yrs cause market crashes & uncertainty.  AB 1207 extends program to 2045.  A 20 year carbon price signal for clean investment in the world’s 4th-largest economy. 4/