Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-technical SummaryIn the current discussion on policy measures to alleviate competitive disadvantages of unilateral climate policies, border measures are discussed as one possible instrument. The assessment of the economic impacts of border measures is often carried out with the help of multi-sector, multi-region computable general equilibrium (CGE) models and depends crucially on empirical data and their quality, in particular if policy makers are to be supported in their concrete decisions. However, these models frequently rely on global economic databases which are, with respect to their sectoral coverage, in many cases too broad to account for specific climate change policies. For instance, border measures may have adverse impacts on energy-intensive and trade-exposed sectors subject to the risk of carbon leakage. The GTAP 7.1 database to which the CGE model PACE (Policy Analysis based on Computable Equilibrium) is calibrated treats many of these industries as part of larger aggregate sectors and might thus miss important information on the heterogeneity of these sectors. In this paper, we use the PACE model to investigate the potential merits of the disaggregation of selected economic sectors. We elaborate on the availability of data resources and methodological issues and make use of a harmonized dataset of supply and use tables with a high sectoral resolution to split the sub-sectors "Cement, lime and plaster", "Aluminium products" and "Manufacturing of iron and steel" out of their respective aggregate GTAP sectors. Drawing on the example of border tax measures, we analyze the impacts of disaggregation on sub-sectoral and macroeconomic indicators. Against the background of potential unobserved heterogeneity at the sub-sectoral level, our main objective is to detect how sensitive CGE simulation results are in terms of changes in the parameterization of disaggregated GTAP sectors. Therefore, we perform sensitivity analyses that involve variations in trade elasticities, energy intensities and technology assumptions. First, we find that a sectoral classification which is too aggregate neglects important insights about sub-sectoral implications. This shows the merits of sectoral disaggregation. Second, regarding the sensitivity analysis, we observe that tremendous deviations in the impact of border measures emerge from variations in Armington elasticities and the structure of the production functions. Third, the effects of sectoral disaggregation are not as...

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10044.pdf Non technical summaryDrawing on specific examples from products and subsectors within the EU ETS, this paper empirically tests to what extent those sectors are able to adjust their output prices when facing an input price change. The pass-through ability of sectors with respect to country-or regionspecific input prices should serve as an indication of the pass-through ability of carbon costs by firms. While the focus of the study lies on estimating pass-through relationships in selected sectors of the UK economy, the advanced econometric methods, particularly related to the asymmetric price transmission, are applied. The latter means the ability of producers to differently pass on positive and negative input price shocks to the consumers. Our results provide new insights into the debate on the ability of pass-through of costs generated by the EU Emissions Trading Scheme. They show that the UK sectors are not capable to completely pass-through their costs into output prices, with the exception of UK ceramic goods. Das Wichtigste in Kürze Abstract. In making key decisions for the future phases of the European Union EmissionsTrading Scheme (EU ETS), policy makers need to fully understand the competitiveness implications of these decisions on industrial sectors. In this paper, we conduct an empirical analysis of cost pass-through ability of producers of selected products within the sectors refineries, glass, chemicals and ceramics of the UK economy. Our results provide new insights into the debate on the ability of pass-through of costs generated by the EU ETS. They suggest that some of the sectors analysed have the ability to pass-through a portion of their carbon costs to the consumers: The UK sectors are not capable to completely pass-through their costs into output prices, with the exception of UK ceramic goods.JEL Classification: C22, D40, H23

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10086.pdf Non-technical summaryUsing advanced time-series techniques, this paper explores the ability of European refineries to pass-through costs associated with the introduction of the EU Emissions Trading Scheme (ETS). The paper thereby fills, the gap in the literature by analysing the interactions between petrol prices and emissions allowances allocated to the refining industry under the EU ETS at the single country level. The analysis is conducted within a multi-national framework and as comprehensive as the weekly data permits, covering 14 EU member states. Given the nonstationarity of variables and the existence of the long-run relationships between the analysed time series, the application of a vector error correction model (VECM) is appropriate. These econometric techniques allow tracking a price transmission process which is induced by the EU ETS in general and by free allocation of allowances in particular while accounting for short-run and long-run dynamics. Our econometric analysis shows that refineries were capable to pass-through prices of EUAs to consumers during the first trading period [2005][2006][2007]. It also discloses the heterogeneity across the EU member states in long-and short-run responses of petrol prices to movements of EUA prices. We run two alternative specifications of the VECM at the country level to check the robustness of the results. Our central finding questions the policy outcome in which emissions from the refining sector will be largely benefiting from free allocation of allowances from 2013 onwards, whereas the power sector falls fully under the auctioning regime. This measure has been introduced to minimise the undesirable distribution impacts that resulted from handing out free permits to the power sector in the "warm-up phase". This paper shows that adverse distributional impacts were also present over the same time horizon in the refining sector. Abstract: This paper explores the ability of European refineries to pass-through costs associated with the introduction of the EU Emissions Trading Scheme (EU ETS). We estimated a sequence of vector error correction models (VECM) within a multi-national setting which covers 14 EU member states. Using weekly data at the country level, this paper finds a significant influence of prices for European Union Allowances (EUAs) on unleaded petrol retail prices during the trial phase of the EU ET...

die zweite Phase angelaufen, in der verstärkte Investitionsanreize zur langfristigen CO 2 -Minderung gesetzt werden sollten. Trotz dieser Zeitspanne liegen bisher kaum Erkenntnisse dazu vor, wie sich das Instrument Emissionshandel in der Praxis bewährt. Wie das aktuelle KfW/ZEW CO 2 Barometer zeigt, nutzen in Deutschland tatsächlich drei Viertel der erfassten Unternehmen die Möglichkeit, Emissionszertifikate zu kaufen oder zu verkaufen. Allerdings lieferten die Preissignale des Emissionshandels den Unternehmen bisher noch keine starken Anreize für Investitionen in CO 2 -Reduktion. Auch beim Einsatz von Minderungsgutschriften aus Treibhausgasreduktionsprojekten aus Entwicklungsländern gibt es noch hohes ungenutztes Potenzial.A. Löschel ( ) · P. Heindl · V. Alexeeva-Talebi Abstract The European Emission Trading Scheme (EU-ETS) is the first large-scale and inter-regional trading scheme for greenhouse gas emissions. It is seen as the central instrument of European climate policy. After a first testing-phase (2005)(2006)(2007), the second trading period of the EU-ETS had started in 2008, with stronger incentives for investment in low-carbon technologies and carbon dioxide abatement. However, there is hardly any evidence how emissions trading fares in practice. The KfW/ZEW CO 2 Barometer shows that trading of emission permits is actively used by 75 percent of German companies, but the price-signals that stem from the EU-ETS were relatively weak so far-too weak to set strong incentives for carbon dioxide emission reductions on the company-level. Also in the case of the 'clean development mechanism' (CDM) which was introduced to promote emission reductions in developing counties, there is need for further development.

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp08061.pdf Non-Technical SummaryIn March 2007, the European Council has agreed upon an ambitious climate policy for the European Union. Given the present lack of an international agreement for the Post-Kyoto era, the EU has committed to an unilateral emission reduction target of 20% of greenhouse gases in 2020 vis-à-vis 1990 levels. However, such an unilateral abatement policy potentially endangers European competitiveness, while the relocation of energy-intensive industries outside Europe may substantially reduce its environmental effectiveness (the so-called 'carbon leakage' problem). To mitigate both detrimental effects, two remedies are currently under consideration in the EU policy arena: border tax adjustments (BTA) and integrated emission trading (IET). Border tax adjustments consist first of tariffs on imported goods mimicking an (environmental) tax on domestic goods and second of rebates for the domestic tax on exported goods. In contrast, under an integrated emission trading regime, foreign producers purchase emission certificates for imports into the EU, while domestic producers do not pay a duty on exports. This paper analyses both policy regimes within a theoretical and a numerical framework. In a stylized two-country model, we demonstrate that both policy options are suitable to address the negative competitiveness implications for domestic producers and to minimise the leakage problem. However, BTA is more effective in protecting domestic competitiveness, while IET reduces foreign emissions to a larger extent. Applying a multi-region, multi-sector general equilibrium model we analyse economic and environmental implications of an unilateral 20% reduction target for the EU including the offsetting policies. The results from our theoretical framework are confirmed for the energy-intensive sectors (covered by either BTA or IET), while the effect of the policy regimes on non-energy intensive sectors (not covered by BTA or IET) significantly modifies the results at the aggregate level: For the domestic energy-intensive and export-oriented sectors the choice between the BTA and IET regimes for the European Union is a matter of priority for protecting their competitiveness or inducing respective foreign energy-intensive sectors to reduce carbon emissions. In contrast, BTA has rather pronounced negative implications for the production level of the sectors not covered by...