Emissions Trading, Capital Flows and the Kyoto Protocol

McKibbin, Warwick J.; Ross, Martin T.; Shackleton, Robert; Wilcoxen, Peter J.

doi:10.5547/issn0195-6574-ej-vol20-nosi-12

Cited by 92 publications

(44 citation statements)

References 19 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…1 The CGE approach consists of a fully specified general equilibrium model which is calibrated on economic data of the real-world economy under consideration. Adding a carbon cycle model and climate change impact model results in an Integrated Assessment Model (IAM) which can account for the feed-back effects of CO 2 emissions on economic activity and 1 For example McKibbin, Ross, Shackleton and Wilcoxen (1999) present a CGE model where some key elasticities are estimated from time series. In this sense, they combine econometric analysis and CGE modelling.…”

Section: Introductionmentioning

confidence: 99%

Exploring the environmental Kuznets hypothesis: Theoretical and econometric problems

Müller–Fürstenberger

Wagner

2007

Ecological Economics

154

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractFocussing on the prime example of CO 2 emissions, we discuss several important theoretical and econometric problems that arise when studying environmental Kuznets curves (EKCs).The dominant theoretical approach is given by integrated assessment modelling, which consists of economic models that are combined with environmental impactmodels. We critically evaluate the aggregation, model dynamics and calibration aspects and their implications for the validity of the results. We then turn to a discussion of several important econometric problems that go almost unnoticed in the literature. The most fundamental problems relate to nonlinear transformations of nonstationary regressors and, in a nonstationary panel context, to neglected cross-sectional dependence. We discuss the implications of these two major and some minor problems that arise in the econometric analysis of Kuznets curves. Our discussion shows that EKC modelling as performed to date is subject to major drawbacks at both the theoretical and the econometric level. KeywordsCarbon Kuznets curve, integrated assessment models, regressions with integrated variables, nonstationary panels JEL Classification Q20, C12, C13 CommentsWe gratefully appreciate the helpful comments of two anonymous reviewers and the editor, which have led to substantial improvements of the paper. Furthermore, the comments of Gregor Bäurle, Robert Kunst, Klaus Neusser, and Reto Tanner are gratefully acknowledged. We thank Benito Müller for providing the data used in this study and for discussions on the topic. The usual disclaimer applies.

show abstract

Section: Introductionmentioning

confidence: 99%

Exploring the environmental Kuznets hypothesis: Theoretical and econometric problems

Müller–Fürstenberger

Wagner

2007

Ecological Economics

154

View full text Add to dashboard Cite

show abstract

“…The endogenization of capital flows has hardly been operationalized in global-scale energyeconomy models (a notable exception being (McKibbin et al, 1999)) because of a lack of shared empirical evidence 12 and unresolved controversies in the economic literature about capital mobility 13 . This is why we resort to exogenous assumptions on the dynamics of capital flows, defined by the net balance between capital exports and imports, including the return to foreign direct investments.…”

Section: Specifications For International Tradementioning

confidence: 99%

“…Domestic as well as international markets for all goods are cleared (i.e. no stock is allowed) by a unique set of endogenous relative prices (the 'terms-of-trade'), which adjust to maintain the equilibrium of the balance of payments defined by the sum of trade flows and capital flows.The endogenization of capital flows has hardly been operationalized in global-scale energyeconomy models (a notable exception being (McKibbin et al, 1999)) because of a lack of shared empirical evidence 12 and unresolved controversies in the economic literature about capital mobility 13 . This is why we resort to exogenous assumptions on the dynamics of capital flows, defined by the net balance between capital exports and imports, including the return to foreign direct investments.…”

mentioning

confidence: 99%

Monetary compensations in climate policy through the lens of a general equilibrium assessment: The case of oil-exporting countries

2013

View full text Add to dashboard Cite

. Monetary compensations in climate policy through the lens of a general equilibrium assessment The case of oil-exporting countries. Energy Policy, Elsevier, 2013Elsevier, , 63, pp.951-961. 10.1016Elsevier, /j.enpol.2013 1 Monetary compensations in climate policy through the lens of a general equilibrium assessmentThe case of oil-exporting countries Henri Monetary compensations in climate policy through the lens of a general equilibrium assessment:The case of oil-exporting countries ABSTRACT This paper investigates the compensations that major oil producers have claimed for since the Kyoto Protocol in order to alleviate the adverse impacts of climate policy on their economies.The amount of these adverse impacts is assessed through a general equilibrium model which endogenizes both the reduction of oil exportation revenues under international climate policy and the macroeconomic effect of carbon pricing on Middle-East's economy. We show that compensating the drop of exportation revenues does not offset GDP and welfare losses because of the time profile of the general equilibrium effects. When considering instead compensation based on GDP losses, the effectiveness of monetary transfers proves to be drastically limited by general equilibrium effects in opened economies. The main channels of this efficiency gap are investigated and its magnitude proves to be conditional upon strategic and policy choices of the Middle-East. This leads us to suggest that other means than direct monetary compensating transfers should be discussed to engage the Middle-East in climate policies.Keywords: monetary transfers; oil exporters; climate policy JEL classification: C68, Q32, Q54 3 Monetary compensations in climate policythrough the lens of a general equilibrium assessment: The case of oil-exporting countriesThe compensation of developing countries for the adverse impacts of climate change and climate policies is one of the constant stumbling blocks of international climate negotiations.These adverse impacts encompass three distinct issues: climate change damages, higher energy prices affecting households' purchase power and firms' production costs and the reduction of exportation revenues in fossil fuel producing economies. Historically, it is under pressure of Middle-East countries and the Organization of the Petroleum-Exporting Countries (OPEC) that these concerns have been officially acknowledged at different stages of international negotiations, since article 4.8 of the UNFCCC 1 and article 3.14 of the Kyoto This repetition is the sign that no tangible progress could be made about this sticking point of climate negotiations in the past decades. This impasse has obvious political roots, i.e. the reluctance of developed countries to grant large transfers towards countries perceived as rent seekers, especially in a context of public budget constraint. But, beyond this political dimension, compensations based on monetary transfers raise questions about both their amount and their efficiency for sustaining economic activity in...

show abstract

“…13. For an instructive discussion on emissions trading and capital flows, see McKibbin et al 1999. 14. The money metric used to assess the welfare costs is the "equivalent variation", i.e.…”

Section: Notesmentioning

confidence: 99%

Climate Change Policies, Energy Security and Carbon DependencyTrade-offs for the European Union in the Longer Term

Kuik

2003

International Environmental Agreements: Politics, Law and Econo

View full text Add to dashboard Cite

Abstract. Energy policy in the European Union (EU) faces two major challenges. The first challenge is posed by EUs commitment to reduce greenhouse gas emissions to the atmosphere in the context of the international agreement on climate change. The second challenge is to keep ensuring European security of energy supply, while its dependency on external sources of energy is projected to increase. In this paper, two long-term alternative climate change policy scenarios for Europe are examined. In the first scenario, EU reduces carbon dioxide emissions by domestic measures; in the second scenario EU maximizes cooperation with the countries of the former Soviet Union (FSU). Impacts on carbon flows between the EU and FSU and on the external energy dependency of the EU are assessed with an applied general equilibrium model, GTAP-E, whose set of energy commodities is expanded with combustible biomass as a renewable and carbon-neutral energy commodity. The results show that there is a trade-off between economic efficiency, energy security and carbon dependency for the EU. The FSU would unambiguously prefer cooperation.

show abstract

Emissions Trading, Capital Flows and the Kyoto Protocol

Cited by 92 publications

References 19 publications

Exploring the environmental Kuznets hypothesis: Theoretical and econometric problems

Exploring the environmental Kuznets hypothesis: Theoretical and econometric problems

Monetary compensations in climate policy through the lens of a general equilibrium assessment: The case of oil-exporting countries

Climate Change Policies, Energy Security and Carbon DependencyTrade-offs for the European Union in the Longer Term

Contact Info

Product

Resources

About