Output-Based Allocation of Emissions Permits for Mitigating the Leakage and Competitiveness Issues for the Japanese Economy

Takeda, Shiro; Arimura, Toshi H.; Fischer, Carolyn; Fox, Alan; Tamechika, Hanae

doi:10.2139/ssrn.1978511

Cited by 9 publications

(11 citation statements)

References 7 publications

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“…One common point of the two papers is that permit allocation using historical emissions can be optimal only in a closed trade system. OBA, the other main type of free AEP method, has attracted increasing attention (Takeda et al 2014). The OBA method was first used formally in the American NO x trade system of the Ozone Transport Commission (Cason and Gangadharan 2003).…”

Section: Non-dea-based Aep Methodsmentioning

confidence: 99%

A DEA-based approach for allocation of emission reduction tasks

Zhu

Chu

et al. 2016

International Journal of Production Research

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Rapid economic growth has led to increasing pollution emission, leading governments to require emission reductions by specific amounts. The allocation of specific emission reduction tasks has become a significant issue and has drawn the attention of academia. Data envelopment analysis (DEA) has been extended to construct the allocation of emission reduction tasks model. These previous DEA-based approaches have strong assumptions about individual enterprise production. In this paper, we propose a new method to accurately assess the production, using each enterprise's previously observed production to construct its own production technology plan. With emission permits decreased, the enterprise can have new production strategy based on its own technology. Assuming emission permits can be freely bought and sold, we show how each enterprise can determine the optimal amount of emission allowance that should be used for production, which may leave some allowance to be sold for extra profit or may require the purchase of permits from other firms. Considering the limitation on the total allowance from emission permits, we introduce the concept of satisfaction degree and use it in maximising the minimum enterprise satisfaction degree. Last, a numerical example is presented and an empirical application is given to verify the proposed approach.

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Section: Non-dea-based Aep Methodsmentioning

confidence: 99%

A DEA-based approach for allocation of emission reduction tasks

Zhu

Chu

et al. 2016

International Journal of Production Research

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“…This option, however, will reduce the economic efficiency of the carbon pricing scheme and shift the burden to other parts of the economy. The second option is the use of cost containment measures such as free allocation or output-based allocation discussed in Fischer and Fox (2007) and Takeda et al (2014).…”

Section: Cost Increase Due To Increasing the Effective Carbon Ratementioning

confidence: 99%

The Economic Effects of Equalizing the Effective Carbon Rate of Sectors: An Input-Output Analysis

Sugino

2020

Economics, Law, and Institutions in Asia Pacific

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The 2 °C target of the Paris Agreement has stimulated the implementation of carbon reducing policies such as carbon taxes and emission trading schemes, which explicitly applies a price on carbon emitting fuels. However, OECD (2016) reports that the effective carbon rate must be at least 30 Euros per ton of CO2. The effective carbon rate includes the implicit carbon price, e.g. energy taxes, along with the explicit carbon price. Previous studies have focused on the effects of explicit carbon prices. In this chapter, we will focus on the effective carbon rate and estimate the effects of carbon policies that increase the effective carbon rate to the 30 Euro threshold. We find that the short-term effect of a carbon tax that raises the effective carbon rate for all industries above 30 Euros will not only effect energy intensive industries, but also downstream industries that already have high effective carbon rates. Furthermore, we find that the carbon tax implemented in 2012 increase the average effective carbon rate, but increases the difference between taxed emitters and non-taxed emitters. Thus, tax exemption for energy intensive industries sacrifices economic efficiency.

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“…We construct a static CGE model with eight regions and 16 sectors, as shown in Table 1. The structure of our model is similar to the models used in Rutherford and Paltsev (2000), Paltsev (2001), Fischer and Fox (2007) and Takeda et al (2014). Details on the model (including the algebraic representation of the model) are provided in the supplementary material.…”

Section: Model and Datamentioning

confidence: 99%

Labor Market Distortions and Welfare-Decreasing International Emissions Trading

Takeda

Arimura

Sugino

2019

Environ Resource Econ

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Using a multi-region, multi-sector computable general equilibrium model, this paper analyzes the effects of international emissions trading (IET) with a focus on labor market distortions. We construct four separate models with several different labor market specifications: (1) a model without labor market distortions; (2) a model with taxinteraction effects in the labor market; (3) a model with a minimum wage; and (4) a model in which a wage curve determines wages. We use these models to analyze how the effects of IET change according to model specification. The main results from the analysis are as follows. First, we found that IET generates gains for all participants in the model without labor market distortions. Second, even in the models with labor market distortions, importers of emissions permits are highly likely to benefit. Conversely, we show that the possibility of a welfare loss from IET is not as small for exporters of permits. In particular, in the minimum wage and wage curve models, we found that the exporters of emissions permits are likely to be disadvantaged. However, this also depends on the region in question. For example, China is likely to suffer under IET, whereas Russia is likely to benefit. Finally, if we implement policies to alleviate labor market distortion simultaneously with emissions regulation, all regions receive benefit from IET.

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Output-Based Allocation of Emissions Permits for Mitigating the Leakage and Competitiveness Issues for the Japanese Economy

Cited by 9 publications

References 7 publications

A DEA-based approach for allocation of emission reduction tasks

A DEA-based approach for allocation of emission reduction tasks

The Economic Effects of Equalizing the Effective Carbon Rate of Sectors: An Input-Output Analysis

Labor Market Distortions and Welfare-Decreasing International Emissions Trading

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