Abstract

This paper presents an assessment of the impacts that policy-induced increases in cost of energy or carbon may have on energy use and emission profiles of the US iron and steel industry. Time series data and engineering information are combined within a dynamic computer model to endogenously specify changes in technologies, fuel mix, and production processes. Results indicate that energy taxes shift production to electric arc furnaces and reduce total energy use more than policies that raise costs of carbon. However, both energy taxes and costs of carbon will result in a similar decrease in carbon emissions when compared to the absence of those policies.