Sectors Under Scrutiny: Evaluation of Indicators to Assess the Risk of Carbon Leakage in the UK and Germany

Sato, Misato; Neuhoff, Karsten; Graichen, Verena; Schumacher, Katja; Matthes, Felix Christian

doi:10.1007/s10640-014-9759-y

Cited by 40 publications

(28 citation statements)

References 44 publications

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“…3 https://ec.europa.eu/clima/policies/ets/allowances/leakage_en too many industries. Sato et al (2015) finds for instance in the EU ETS that "vulnerable sectors account for small shares of emission", and Martin et al (2014) concludes for the same market that the current allocation substantially overcompensates for a given carbon leakage risk. Another possible second-best policy instrument for anti-leakage is Border Carbon Adjustments (BCAs), with put charges on embedded carbon imports and refunds on export of EITE goods.…”

Section: Introductionmentioning

confidence: 99%

Taxing Consumption to Mitigate Carbon Leakage

Kaushal

Rosendahl

2019

Environ Resource Econ

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Unilateral actions to reduce CO2 emissions could lead to carbon leakage such as relocation of emissionintensive and trade-exposed industries (EITE). To mitigate such leakage, countries often supplement an emissions trading system (ETS) with free allocation of allowances to exposed industries, e.g. in the form of output-based allocation (OBA). This paper examines the welfare effects of supplementing OBA with a consumption tax on EITE goods. In particular, we investigate the case when only a subset of countries involved in a joint ETS introduces such a tax. The analytical results suggest that the consumption tax would have unambiguously global welfare improving effects, and under certain conditions have welfare improving effects for the tax introducing country as well. Numerical simulations in the context of the EU ETS support the analytical findings, including that the consumption tax is welfare improving for the single country that implements the tax.

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Section: Introductionmentioning

confidence: 99%

Taxing Consumption to Mitigate Carbon Leakage

Kaushal

Rosendahl

2019

Environ Resource Econ

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“…Although the third EU ETS phase revised benchmarking allocation scheme recently put into action has reduced free allocations, Stenqvist and Åhman (2016) suggest it remains unlikely to incentivize investments in low carbon production at the desired scale of change needed in some sectors. Arguably the EU ETS is failing to incentivize low carbon production (Sato, Neuhoff, Graichen, Schumacher, & Matthes, 2015), including the reduction of material use (Spash, 2010), to levels required for a two degree, or lower, future, contributing to an emissions gap.…”

Section: Eu Climate Policiesmentioning

confidence: 99%

Extending European energy efficiency standards to include material use: an analysis

et al. 2017

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Existing international emissions reduction policies are not sufficient to meet the internationally agreed objective of limiting average global temperature rise to 'well below' two degrees, resulting in an emissions gap. Materialssuch as aluminium, cement, paper, plastics and steelact as a carrier of industrial energy that allows, through trade, the transfer of embodied emissions between sectors and countries. However, the use of materials has been overshadowed by policies focusing on energy efficiency improvements and deployment of a low carbon energy supply. This article argues that policies based on material and product demand can support domestic climate change mitigation and reduce the emissions gap, yet there is little obvious integration between climate and material efficiency policies. The article investigates current 'emissions flows' through the EU economy and how much of these are captured and excluded from existing EU climate policies. We analyse the potential increase in emissions coverage that would be achieved by extending EU directives that currently target the energy use of products (cars, buildings and appliances) in operation, to include the emissions required to produce the goods (i.e. embodied emissions). The analysis shows that a greater integration of material efficiency strategies within climate change mitigation policy could significantly increase the emissions coverage of existing product policies. Key policy insights. Consumption is a key driver of emissions and demand reduction is an important policy option in reducing emissions, at least in the short-term, to reduce the risks of a longer-term reliance on technology breakthroughs and while the EU carbon price remains low.. Emissions embodied in material-intensive manufactured products consumed in the EU represent the equivalent of over 40% of EU production emissions, offering significant scope for emissions reductions along product supply chains.. Consumption measures that target the use of materials and products offer complementary mitigation options to low carbon energy supply technologies alongside costs savings.. Existing EU policies addressing the energy efficiency of products can be used to scale up material efficiency measures.

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“…To complete the picture, we add a complementary perspective on the values at stake in the respective parts of supply chain for cement. We do so by comparing the cost increases with the Gross Value Added (GVA) in the respective sector, as suggested by Sato et al (2013) and Neuhoff (2008). Figure 12 presents the values at stake in the Swedish cement, RMC, and construction industries given different assumptions with respect to the choice of kiln system and the pricing of emissions allowances in the primary production of cement.…”

Section: Summary and Perspectivesmentioning

confidence: 99%

Managing the costs of CO₂ abatement in the cement industry

Rootzén

Johnsson

2016

Climate Policy

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This paper investigates how costs associated with deep reductions in CO2 emissions from the cement industry will influence the cost across the entire value chain, from cement production to eventual end-use, in this case, a residential building. The work is motivated by the substantial difference between the pricing of CO2 emissions and the cost of mitigation at the production sites of energy-intensive industries, such as cement manufacture. By examining how CO2 trading and investments in low-carbon kiln systems affect costs and prices further up the supply chain of cement our analysis provides new perspectives on the costs of industry abatement of CO2 and on the question of who could or should pay the price of such abatement. The analysis reveals that cost impact decrease substantially at each transformation stage, from limestone to final end-uses. The increase in total production costs for the residential building used as the case study in this work is limited to 1%, even in the cases where the cement price is assumed to be almost doubled.

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Sectors Under Scrutiny: Evaluation of Indicators to Assess the Risk of Carbon Leakage in the UK and Germany

Cited by 40 publications

References 44 publications

Taxing Consumption to Mitigate Carbon Leakage

Taxing Consumption to Mitigate Carbon Leakage

Extending European energy efficiency standards to include material use: an analysis

Managing the costs of CO₂ abatement in the cement industry

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Sectors Under Scrutiny: Evaluation of Indicators to Assess the Risk of Carbon Leakage in the UK and Germany

Cited by 40 publications

References 44 publications

Taxing Consumption to Mitigate Carbon Leakage

Taxing Consumption to Mitigate Carbon Leakage

Extending European energy efficiency standards to include material use: an analysis

Managing the costs of CO2 abatement in the cement industry

Contact Info

Product

Resources

About

Managing the costs of CO₂ abatement in the cement industry