Unilateral Climate Policy and Competitiveness: Economic Implications of Differential Emission Pricing

Böhringer, Christoph; Alexeeva-Talebi, Victoria

doi:10.1111/j.1467-9701.2012.01470.x

Cited by 8 publications

(1 citation statement)

References 56 publications

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“…Böhringer et al (2011b) show that as the climate coalition gets larger, the efficiency costs of implied output subsidies ultimately outweigh the benefits of reducing emission leakage. As to preferential emission pricing for EITE industries as well as Böhringer and Talebi (2012) find substantial justification for emissions price differentiation to deter leakage but caution on substantial excess cost is warranted as unilateral reduction targets are more moderate and EITE industries get close to exemptions. 1 Our contribution to the economic literature on unilateral climate policy design is twofold.…”

Section: Introductionmentioning

confidence: 99%

Unilateral climate policy design: Efficiency and equity implications of alternative instruments to reduce carbon leakage

Böhringer¹,

Carbone²,

Rutherford³

2012

Energy Economics

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135

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Section: Introductionmentioning

confidence: 99%

Unilateral climate policy design: Efficiency and equity implications of alternative instruments to reduce carbon leakage

Böhringer¹,

Carbone²,

Rutherford³

2012

Energy Economics

Self Cite

135

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Optimally differentiated carbon prices for unilateral climate policy

Boeters

2014

Energy Economics

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The EU Decarbonisation Roadmap 2050—What way to walk?

Hübler

Löschel

2013

Energy Policy

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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 SummaryThe objective of this study is the economic analysis of the Decarbonisation Roadmap 2050, recently published by the EU Commission. The Decarbonisation Roadmap is the latest strategy to make the decarbonisation of the EU reality. It aims at a reduction in greenhouse gas emissions of more than 80% in 2050 vis-à-vis 1990 and an expansion of renewable energies to 50% or more in electricity generation in 2050. Since there is a lack in detailed economic analysis of this latest EU climate strategy so far, our study aims at shedding more light on it at the sectoral and the macro level.Compared to the EU Roadmap simulations, we examine especially welfare effects, carbon leakage and terms of trade on the macro level, and output, investment, emissions and competitiveness on the sectoral level.For this purpose, our study significantly extends the Computable General Equilibrium (CGE) model PACE (Policy Analysis based on Computable Equilibrium) developed at ZEW Mannheim: The model combines an extended sectoral disaggregation (beyond GTAP 7, Global Trade Analysis Project) with a bottom-up representation of technologies for electricity generation. It represents current EU climate policies as well as Copenhagen Pledges for 2020 in a new reference scenario and extends the time horizon of the model from 2020 to 2050. The recursive-dynamic model is recalibrated in dynamic terms using data from the European Commission and the U.S. Energy Information Administration. We study one Reference scenario and six policy scenarios implementing the Roadmap emissions targets (Fragmented Action; Fragmented Action with sustained free allocation of allowances; Fragmented Action with extended future use of the Clean Development Mechanism, CDM; Global Action, Global Action with equalisation of the CO2 price within the EU; Global Action with global equalisation of the CO2 price) and discuss and compare the results. Herein, we contribute to the literature on EU climate policy analyses with the help of CGE models and to the literature of longterm integrated assessment studies as well.The simulation of the Fragmented Action scenario yields the following key results: The costs for the EU-27 induced by the Decarbonisation Roadmap could stay below 0.3% until 2020 and below 2% until 2035 in terms of consumption losses (or welfare effects). They might increase to 3% thereafter and possibly increase significantly in later periods in the absence of breakthrough technologies. The internatio...

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Unilateral Climate Policy and Competitiveness: Economic Implications of Differential Emission Pricing

Cited by 8 publications

References 56 publications

Unilateral climate policy design: Efficiency and equity implications of alternative instruments to reduce carbon leakage

Unilateral climate policy design: Efficiency and equity implications of alternative instruments to reduce carbon leakage

Optimally differentiated carbon prices for unilateral climate policy

The EU Decarbonisation Roadmap 2050—What way to walk?

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