The Impacts of Unilateral Climate Policy on Competitiveness: Evidence From Computable General Equilibrium Models

Carbone, Jared C.; Rivers, Nicholas

doi:10.1093/reep/rew025

Cited by 97 publications

(66 citation statements)

References 43 publications

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“…We can obtain φ * by solving the first-order condition of W(φ): Taken Equation (19) to replace the demand function, the first-order conditions of Equation (4) are:…”

Section: (3) Analytical Solution To the Multi_ob Casementioning

confidence: 99%

“…Top-down approaches, such as the computable general equilibrium (CGE) models, are often used in multi-sector studies and are widely used when studying the economic effects of policies on given countries or specific areas. Goulder, for example, uses the dynamic CGE model to simulate the impact of carbon tax policy on the economy in the United States [18]; Carbone and Rivers consider the measurement of competitiveness due to climate policies in computable general equilibrium (CGE) models and discuss the weaknesses of the existing approach [19]. CGE models also have been shown to be useful in the assessment of the impact of the EU 20 energy and climate package (European Union (EU), 2020 Climate & Energy Package.…”

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confidence: 99%

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On the Effectiveness of the Abatement Policy Mix: A Case Study of China’s Energy-Intensive Sectors

Liu

Zhang

et al. 2018

Energies

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To achieve carbon emissions control targets, policymakers often need a basket of policies to account for the complexity of abatement. The instruments in the policy mix are often interconnected. It is of great importance to study how different abatement policies perform in practice-in other words, to evaluate the effectiveness of the abatement policy mix. This paper builds a multisector partial equilibrium model and then studies the policy effectiveness using data from two energy-intensive sectors in China, namely, the iron and steel sector and the cement sector. The results show clear evidence that these policies interact, and the policy mix is not a simple aggregation but rather differs across sectors, which leads to fundamentally different scenarios in terms of energy savings, emissions reductions and production behaviors. Energy-savings subsidies can increase production and profit with a lower equilibrium level of carbon prices, whereas output-based rebating of allowances reduces production and is associated with higher carbon prices.

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“…We can obtain φ * by solving the first-order condition of W(φ): Taken Equation (19) to replace the demand function, the first-order conditions of Equation (4) are:…”

Section: (3) Analytical Solution To the Multi_ob Casementioning

confidence: 99%

mentioning

confidence: 99%

On the Effectiveness of the Abatement Policy Mix: A Case Study of China’s Energy-Intensive Sectors

Liu

Zhang

et al. 2018

Energies

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“…Given the policy relevance of the leakage issue, a sizable literature, mostly based on ex ante computable general equilibrium (CGE) models, has attempted to predict the extent of carbon leakage from existing policy initiatives and potential modifications (as reviewed by Quirion 2014, Carbone andRivers 2017). These ex ante approaches predict strong carbon leakage with leakage rates between 10% and 30% (Carbone andRivers 2017, IPCC 2007).…”

Section: Introductionmentioning

confidence: 99%

“…These ex ante approaches predict strong carbon leakage with leakage rates between 10% and 30% (Carbone andRivers 2017, IPCC 2007). 5 However, the predictions of ex ante approaches depend on model assumptions, e.g.…”

Section: Introductionmentioning

confidence: 99%

Does the EU ETS Cause Carbon Leakage in European Manufacturing?

Naegele

Zaklan

2017

SSRN Journal

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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. Carbon leakage is an issue of major interest in both academic and policy debates about the effectiveness of unilateral climate policy addressing global externalities. The debate is particularly salient in Europe, where the EU Emissions Trading System (EU ETS) covers emissions of many traded sectors. In a first step, we review how carbon leakage and the pollution haven effect are defined and identified in the literature. In a second step, we evaluate whether the emission cost introduced by the EU ETS has caused carbon leakage in European manufacturing. We compute trade flows in embodied carbon and value, using GTAP trade and input-output data and administrative data from the EU ETS. We evaluate the effect of four measures of environmental stringency on both net trade flows and bilateral trade flows. We do not find evidence that the EU ETS has caused carbon leakage. Terms of use: Documents inJEL codes: F18, Q58, Q54 Keywords: Carbon leakage, pollution haven, EU ETS, cap-and-trade, CO 2 emissions, policy evaluation. * We thank conference participants in Zurich (EAERE), Lisbon (EARIE), Oviedo (EMEE) and Bergen (IAEE), and seminar participants in Toulouse and Berlin for fruitful discussions. We also thank Jan Abrell, Pio Baake, Sylvain Chabé-Ferret, Antoine Dechezleprêtre, Denny Ellerman, Christian von Hirschhausen, Philipp Richter, and Sebastian Schwenen for valuable comments. All remaining errors are ours.

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“…To study the issue, we use the CGE model that can be used to analyze a macro-economic impact. The model is widely used to analyze policy impact, such as Carbone and Rivers' (2017) [21] studies on the impacts of unilateral climate policy on competitiveness and Pui and Othman (2017) [22] examining the impact on economic growth and sectoral performance with fuel subsidy savings being reallocated to the biofuel industry for research and development purposes. In research by Wu et al (2014) [23], Chinese GDP is estimated using a recursive dynamic CGE model.…”

mentioning

confidence: 99%

Impact of Electricity Production Tax on China’s Economy, Energy, and Environment: A CGE-Based Study

Wang¹,

Dong²,

Yong³

et al. 2018

Pol. J. Environ. Stud.

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The Impacts of Unilateral Climate Policy on Competitiveness: Evidence From Computable General Equilibrium Models

Cited by 97 publications

References 43 publications

On the Effectiveness of the Abatement Policy Mix: A Case Study of China’s Energy-Intensive Sectors

On the Effectiveness of the Abatement Policy Mix: A Case Study of China’s Energy-Intensive Sectors

Does the EU ETS Cause Carbon Leakage in European Manufacturing?

Impact of Electricity Production Tax on China’s Economy, Energy, and Environment: A CGE-Based Study

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