Computable general equilibrium (CGE) models are the premier analytical platform for assessing the economic impacts of climate change mitigation. But these models tend to treat physical capital as “malleable”, capable of reallocation among sectors over the time-period for which equilibrium is...

We use theoretical and numerical general equilibrium models to analyze the Regional Greenhouse Gas Emission Initiative (RGGI), a cap-and-trade scheme to limit carbon dioxide emissions from electricity generators across ten states in the northeast U.S. Although RGGI’s economic impacts are...