L1D48

(1.4)
L1T80 (23%): emissions (9%), carbon_tax (7%)

L1T83 (10%): tax (10%)

L1T4 (7%): reduce (7%), increase (6%), total (4%), reduction (4%)

L1T82 (4%): gdp (12%), co2_emissions (10%), carbon_emissions (9%), carbon_emission (7%)

L1T41 (3%): price (27%), prices (17%)

L1T90 (3%): effects (19%)
titleabstract

ON THE MINIMUM ECONOMIC COST FOR A CARBON-DIOXIDE REDUCTION STRATEGY (1990) 🗎🗎

A first recommendation for determining the minimum cost for a carbondioxide reduction strategy is presented. For this, tabulation of so-called "CO2 ranking lists" containing the relationship between the cost of a distinct measure to avoid the emission of a certain amount of CO2 (in $/t CO2) versus its potential (in t CO2/yr) is indispensable. Some basic aspects of this approach are discussed and a first guess of the cost of some measures to avoid CO2 emissions into the atmosphere is presented.

AGRICULTURE IN THE GATT - AN ASSESSMENT OF THE USAS 1989 PROPOSAL (1991) 🗎🗎

This article provides an assessment of the USA's 1989 GATT proposal for farm policy reform. The implications of the proposal for the EC and the USA are investigated through a simulation over a five-year period. The proposal required tariffication of all supports and the phasing out over five years of export subsidies and over 10 years of other measures (tariffs, deficiency payments). It would have hurt farm income and the trade balance considerably more in the EC than in the USA, but budget savings would have been larger in the EC. Overall the burden and the pace of adjustment resulting from this proposal would have weighed much more heavily on the EC than the USA. This analysis stresses the weakness of the EC's position due to the excessive use of export subsidies in the conduct of the CAP.

A CARBON TAX TO REDUCE CO2 EMISSIONS IN EUROPE (1992) 🗎🗎

This paper examines the effects of introducing a tax on carbon dioxide emissions produced by combustion processes in OECD-European countries. A sectoral model of energy consumption is constructed to examine energy-saving and inter-fuel substitution effects induced by the introduction of various carbon taxes. The simulation period is 1989-94. Our results provide a mild support to the environmental role of a carbon tax. Energy-saving or inter-fuel substitution processes, that result from the introduction of environmental taxation, stabilize emissions at the 1988 level only in the electricity generation sector, and only if high tax rates are assumed ($100/ton.C). By contrast, total emissions (all sectors and all fuels) keep growing, and the implementation of a tax of $100/ton.C can only reduce the emission growth rate. These results would recommend the introduction of several coordinated environmental instruments. The last part of the paper compares results concerning OECD-Europe with those obtained when examining a single country (Italy). The comparison does not seem to be in favour of a uniform carbon tax; it rather indicates that environmental policy should be designed taking into account the specific economic situation and technological choices of each single country. Country-specific coordinated environmental policies are to be recommended, where international coordination ought to concern environmental targets rather than instruments.

QUANTITATIVE ENVIRONMENTAL-POLICY - THE ECONOMIC-IMPACT OF CO2 TAX IN GERMANY (WEST) (1993) 🗎🗎

The objective of this paper is to measure the economic impact of a CO2 tax using an applied general equilibrium model in 48 industries. The dynamic CO2 tax rate is based on a EC proposal to stabilize CO2-emissions in the year 2000 on the emission level of 1989. A key issue in specifying models of producer behavior is the role of technical change and the size of the elasticity of substitution. Only by varying these key parameters different base projections emerge showing considerable distance from a stabilisation Of CO2-emissions. Our model traces the path of economic variables such as prices, growth, employment and CO2-emissions towards a stabilisation Of CO2-emissions by varying the assumptions on energy-efficiency and subsitution possibilities.

ENERGY INTENSITY IMPROVEMENTS IN STEEL MINIMILLS (1993) 🗎🗎

Over the past 20 years, U.S. steel manufacturing has experienced an episode of creative destruction. Iron-ore based plants closed, and new electric arc furnace (EAF) plants-the ''minimills''-opened. The steel industry is an ene?gy intensive segment of manufacturing, and the changeover causes major change in energy use. The analysis here links a plant-level database from the Bureau of the Census with publicly available sources and obtains measures of the best practice energy use in minimills. The analysis examines how technical efficiency, vintage, and capacity utilization affect plant-level electricity use per ton of steel. This measure of electricity use gives a plant's ''energy intensity.'' Plants in the sample keep operating even during deep recessions, suggesting that energy, eg., BTU, taxes may fall short of the fullest potential for reducing energy use. During recession, plants actually may continue to operate at lower output rates and higher energy intensities rather than close down. Substantial potential exists for energy improvements of as much as 1 billion kWh per year. New facilities exhibit energy intensity improvement of 6.2 kWh/ton per year. This finding is consistent with engineering estimates. Realizing this potential among all plants would require policies that assist capital turnover.

Oil Production Outside OPEC and the Former Soviet Union: A Model Applied to the US and UK (1994) 🗎🗎

Oil production in the area outside OPEC and the Former Soviet Union (FSU) has grown steadily for the past 30 years. This growth is expected to continue despite the decline in oil prices since 1985. The steady growth in production contrasts with dramatic swings in oil prices. Non-price factors such as policies, enterprise behavior, and technical phenomena are important. This article sketches a model for tracing their interaction over time. The model is tested against the very different histories of oil production in the U. S. and U. X The main conclusion is that non-price factors are important and differ between countries: in the U.S., environmental policy, and in the U.K., tax policy have been critical in determining oil production. The model may be extended to countries dominated by state oil enterprises, which account for most of the remaining production in this area, but this would require country-by-country analysis.

THE IMPACT OF OIL COMPANY INVESTMENT ON THE WORLD COAL INDUSTRY - OVERCAPACITY AND PRICE DESTABILIZATION 1973-92 (1995) 🗎🗎

This paper investigates the impact of oil company investments on the world coal industry since the first oil price shack of 1973. It details the scope of these investments, both in the USA and elsewhere, and demonstrates how they have served to destabilize and depress international coal prices. In particular it establishes a novel and robust link between oil company investment in US coal which is sold on the domestic market and the behaviour of US coal export prices.

EFFECTS OF THE EARNED INCOME-TAX CREDIT ON INCOME AND WELFARE (1995) 🗎🗎

This paper uses the familiar static labor supply model to estimate the effects of the earned income tax credit (EITC) on disposable money income and welfare for the recipient population. Since about two-thirds of recipients, and 84 percent of total earnings, are in the phase-out range of the program, the emphasis is on this group. Using average values for compensated wage elasticities and total income elasticities from the empirical literature, it is estimated that nearly half of recipients in the phase-out range will reduce earnings enough so that their total disposable money incomes decline. In addition, the marginal net benefit averages less than 50 cents per dollar of program cost for this group.

THE ECONOMIC-IMPACT OF SUBSIDY PHASE-OUT IN OIL EXPORTING DEVELOPING-COUNTRIES - A CASE-STUDY OF ALGERIA, IRAN AND NIGERIA (1995) 🗎🗎

One of the crucial issues of energy markets in oil exporting developing countries is the high level of subsidies on petroleum products and the low efficiency in energy use. The purpose of this paper is to investigate the impacts of a subsidy phase out policy on the energy sector and oil revenues in three countries: Algeria, Iran and Nigeria. By using a standard econometric approach, we find that the effects of different deregulation policies are substantial. We also analyse the impact of a policy based on autonomous energy-efficiency improvement. Finally, a combination of both policies is elaborated and quantified. Our results show that a policy geared at more rational use of energy would permit these countries to save enough oil to meet future increases in demand while maintaining stable production capacity. Furthermore, such an energy policy could result in additional oil revenues which would enhance their economic development.

The cost of air pollution abatement (1997) 🗎🗎

Data on 100 000 US factories is used to develop comprehensive abatement cost estimates by industry sector for seven major air pollutants. The results reveal very high intersectoral variances in marginal and average abatement costs: maximum/minimum ratios are frequently near 10, and occasionally near 100. The implications of these new estimates are discussed for three policy issues: (1) the relative accuracy of forecasts from econometric and engineering projections for environmental policy analysis; (2) the cost of command-and-control regulation of air pollution in the US; and (3) the use of benefit-cost analysis for setting air pollution control priorities in developing countries.

Greenhouse gas economics and computable general equilibrium (1998) 🗎🗎

This paper employs a new class of computable general-equilibrium (CGE) models, developed in the context of energy-economy-environmental models to simulate the impacts of the EU economy of internal and multilateral instruments for regulation of greenhouse gases (GHGs) emissions. Climate change due to emissions gases of greenhouse gases is a long-term global environmental problem. While specific impacts on different regions as well as their timing are yet uncertain, it is reasonable to suppose that unilateral voluntary action by individual countries to reduce their net emissions of GHGs is unlikely. This is because significant reduction of net GHGs emissions by a single major net emitter, say, for example the EU, is unlikely to substantially slow down the rate of increase in concentration in the atmosphere because the emissions of GHGs worldwide is increasing rapidly with spreading industrialization. On the other hand, unilateral changes in energy use patterns are widely perceived to have: adverse effects on a country's economic growth, consumer welfare and trade competitiveness. This perception is shared by both developing (DCs) and industrialized countries (INCs). Some major policy instruments have been assessed on the basis of experiments with the CGE model. The use of each of the policy instrument for direct GHGs regulation is promising. The results of the above experiments seem to show, that first, emission standards accomplish significant decreases in net GHGs emissions with negligible relative GDP and Welfare index changes and without major distributional impacts in the sense of relative changes in factor rewards. They seem to work through major reduction in coal and natural gas use and slight overall reduction in the use of petroleum. Second, auctioned tradeable permits also accomplish large decreases in net GHGs emissions, with, however a perceptible increase in the Welfare Index and significant distributional impacts in higher rewards to land owners and labor relative to capital owners. They appear to work primarily by expansion to the forest sector and associated increases offsets generation. Third, the use of a GHGs tax on positive net emissions of GHGs by industries accomplishes large reductions in net GHGs emissions with significant increase in GDP and the Welfare Index. The relative changes in factor rewards are also important and favor land owners over labor and capital owners. This instrument too appears to work primarily through considerable expansion of the forest sector and consequent increases offsets generation. Each of these instruments show sufficient promise as effective policy tools for GHGs reduction, that it would be advisable to conduct further research in each case. The choice between standards on the one hand. and market-based domestic regulatory instruments on the other, is not straightforward. These results need verification through further analysis. (C) 1998 Society for Policy Modeling. Published by Elsevier Science Inc.

The political economy of market-based environmental policy: The US acid rain program (1998) 🗎🗎

The U.S. acid rain program enacted in 1990 gave valuable tradable sulfur dioxide emissions permits-called "allowances"-to electric utilities. We examine the political economy of this allocation. Though no Senate or House votes were ever taken, hypothetical votes suggest that the actual allocation would have beaten plausible alternatives. While rent-seeking behavior is apparent, statistical analysis of differences between actual and benchmark allocations indicates that the legislative process was more complex than simple models suggest. The coalition of states that produced and burned high-sulfur coal both failed to block acid rain legislation in 1990 and received fewer allowances than in plausible benchmark allocations. Some of these states may have received additional allowances to cover 1995-99 emissions by giving up allowances in later years, and some major coal-producing states seem to have focused on benefits for miners and on sustaining demand for high-sulfur coal.

Deregulation of the Nordic power market and environmental policy (1999) 🗎🗎

A common Nordic power market will reduce total CO2 emissions in the Nordic countries as compared to a situation of autarky and, thus, reduce the aggregate cost of complying to strict national CO2 emission targets. A common market for CO2 emission permits may reduce the aggregate cost further, but this cost reduction will be smaller the harsher the CO2 emission constraints are. The economic gain of introducing a common Nordic power market will be particularly large in the case of a Swedish nuclear power phase out. In this case, the cost reduction of introducing a common market for CO2 emission permits will not be very large. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classlfcations: C61; F11; F14; L94; Q41.

Economic impacts of the 1997 EU energy tax: Simulations with three EU-wide models (2000) 🗎🗎

In March 1997 the European Commission adopted a proposal that increases existing minimum levels of taxation on mineral oils by around 10 to 25% and introduces excises for other energy products. This paper analyses the macroeconomic impacts of the proposal. It employs three models: HERMES, GEM-E3, and E3ME. All models confirm that the proposal will have positive macroeconomic impacts when the tax revenues are used to reduce social security contributions paid by employers. For the EU as a whole, both GDP and employment are expected to be higher and CO2 emissions are 0.9 to 1.6 percent lower. The positive EU-wide effects can be observed in practically all member states. The sector impacts are modest, with the energy sector expected to face the most negative impacts. Differences between model results are due to the model type (general equilibrium or macro-econometric), the EU countries covered and the way tax exemptions were handled. Crucial assumptions to obtain the "double dividend" are the modelling of the labour market and the impacts on EU external trade. The sensitivity of the results for the use of tax revenues, tax exemptions and tax rate increases is assessed.

The transportation-production tradeoff in the regional environmental impact of industrial systems: a case study in the paper sector (2000) 🗎🗎

The author presents a methodology which is used first to model a product-manufacturing-and-distribution system, and then to predict the resulting changes in environmental impact from changes either in taxation or in costs of inputs. A case study of the paper sector in the eastern and central United States is developed, derived from the 1993 US Commodity Flow Survey. From an analysis of five scenarios, two central findings arise: (1) the model is found to be unresponsive to even large changes in transport taxation, so an environmental policy which considers both transportation and production aspects at the same time is favored, and (2) fluctuations in raw-material costs can have an influence on environmental impact as great as or greater than that of changes in taxation levels.

Carbon emissions control and trade liberalization: coordinated approaches to Taiwan's trade and tax policy (2001) 🗎🗎

In recent years, several studies have emerged on the possible reconciliation between trade and environmental policies. However, little attention has been devoted to inquiring about the economic implications of the linkages of these policies in the newly industrialized countries (the so-called NICs). In this paper. we investigate the joint effects of trade and environmental policies on the Taiwan economy. The estimates are derived from a five-household, 18-sector computable general equilibrium model calibrated to a 1995 social accounting matrix. Our empirical results based on Taiwan's data show that tariff elimination can significantly reduce the costs of carbon emissions control and possibly offset welfare reductions due to implementation of a carbon tax. Our findings reveal that the coordination of trade liberalization with the introduction of targeted environmental policies enhances factor relocation towards competitive industries; they are broadly consistent with those casts of developing countries reported in previous studies. (C) 2001 Elsevier Science Ltd. All rights reserved.

Global warming and German agriculture - Impact estimations using a restricted profit function (2001) 🗎🗎

This study uses the concept of shadow prices for measuring the impacts of climate change. By estimating a restricted profit function rather than a cost or a production function the explanatory power of the model is increased because of an endogenous output structure. Using low aggregated panel data on Western German farmers, the results imply that the agricultural production process is significantly influenced by climate conditions. Simulation results using a 2 x CO2 climate scenario show positive impacts for all regions in Germany. Interestingly, the spatial distribution of the gains is indicating no advantage for those regions, which currently suffer from insufficient temperature. Finally, the importance of an endogenous output structure is confirmed by the finding that the desired product mix will drastically change.

Implementing the Kyoto accord in Canada: Abatement costs and policy enforcement mechanisms (2001) 🗎🗎

The anticipated abatement costs to be incurred by Canada and six of its provinces from the implementation of the Kyoto agreement (reduction of carbon dioxide (CO2) emissions generated by fossil fuel burning by 6% from 1990 levels) are estimated using an emissions benefit function. Marginal abatement cost functions are estimated a,ld used for the analysis of alternative policy enforcernelzt mechanisims. The efficiency of a policy mechanism depends on the rule used to allocate the burden of the agreement among the provinces and on whether the provinces or the federal government implement the agreement at th provincial level. Under the rule of an equal emission reduction of 6% over 1990 levels in all provinces, Quebec bears no abatement costs while British Columbia and Saskatchewan incur the highest costs. An allocation rule based on the equimarginal principle achieves aggregate efficiency; it is, however the rule that contains the risk of noncompliance by provinces that have already taken action toward emissions reduction.

The Mexican energy sector: integrated dynamic analysis of the natural gas/refining system (2002) 🗎🗎

Environmental regulations in Mexico could dramatically increase demand for natural gas in the following years. This increase could lead to gas price shocks and a counter-intuitive increase in carbon emissions. The effect would be accentuated if Mexico lacks the funds required to carry on with investments in gas development and processing capacity. With the use of a dynamic computer model, this study addresses responses of the Mexican oil and gas industries to perturbations such as: changes in regulatory and environmental policies; changes in institutional arrangements such as those arising from market liberalization; and lack of availability of investment funds. The study also assesses how regulatory policies can be designed to minimize the economic inefficiencies arising from the business cycle disruptions that some perturbations may cause. In addition, this study investigates how investment responses will shape the Mexican energy sector in the future, particularly with respect to both the relative importance of different fuels for power generation and heating purposes and the nature of competition in the Mexican natural gas market. Furthermore, this study explores the direct consequences of these responses on the level of carbon emissions. (C) 2002 Elsevier Science Ltd. All rights reserved.

Energy price, environmental policy, and technological bias (2002) 🗎🗎

This paper investigates input biasing characteristics of technology, environmental compliance, and changing energy prices. In particular we wish to investigate whether input biases of technology and environmental compliance are induced by changes in relative fuel prices, or whether there are price induced technology and environmental compliance biases. Using a two-stage optimization, we estimate a truncated third-order translog model by its associated (second order) cost share equations. The model uses two-digit SIC data panel for the period 1974-1991. We find evidence of significant fuel-saving technological bias, while environmental compliance has been significantly fossil fuel using. The results indicate that technology and environmental compliance biases are, in part, induced by changes in relative fuel prices and such induced biases are mainly fuel saving. Finally, our demand elasticity estimates indicate that industrial demand for most fossil fuels and purchased electricity is significantly price inelastic. Policy implications of these results are also briefly discussed.

Jobs versus the environment: An industry-level perspective (2002) 🗎🗎

The possibility that workers could he adversely affected by increasingly stringent environmental policies has led to claims of a "jobs versus the environment" trade-off by both business and labor leaders, The present research examines this claim at the industry level for four heavily polluting industries: pulp and paper mills, plastic manufacturers, petroleum refiners, and iron and steel mills. Combining a unique plant-level data set with industry-level demand information, we find that increased environmental spending generally does not cause a significant change in employment. Our average across all four industries is a net gain of 1.5 jobs per $1 million in additional environmental spending. with a standard error of 2.2 jobs-an economically and statistically insignificant effect. There are statistically significant and positive effects in two industries, but total number of affected jobs remains quite small. These small positive effects can be linked to labor-using factor shifts and relatively inelastic estimated demand. (C) 2001 Elsevier Science (USA).

Moving to greener pastures? Multinationals and the pollution haven hypothesis (2003) 🗎🗎

This paper presents evidence on whether multinationals are flocking to developing country "pollution havens". Although we find some evidence that foreign investors locate in sectors with high levels of air pollution, the evidence is weak at best. We then examine whether foreign firms pollute less than their peers. We find that foreign plants are significantly more energy efficient and use cleaner types of energy. We conclude with an analysis of U.S. outbound investment. Although the pattern of U.S. foreign investment is skewed towards industries with high costs of pollution abatement, the results are not robust across specifications. (C) 2002 Elsevier Science B.V All rights reserved.

Environmental taxation and economic effects: a computable general equilibrium analysis for Turkey (2003) 🗎🗎

This study explores economic effects of environmental taxation using an energy-economy-environment computable general equilibrium model of the Turkish economy. The model disaggregates the Turkish economy into seven sectors and describes production within a nested CES representation. Results, which are obtained under a Business-As-Usual as well as various environmental tax scenarios, provide insight into energy-economy-environment interactions in Turkey and indicate opportunities for an ecologically and economically sustainable development of the country. Besides general policy implications, it is found that a second dividend of environmental taxation, that is economic benefits in addition to environmental improvements, is possible when imported fuels are the primary source of pollutant emissions. This result has been obtained under tax revenue recycling that assumes public consumption of tax revenues instead of the common practice of using tax revenues for reducing existing tax distortions in order to obtain a second dividend. (C) 2003 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

Climate policies and induced technological change: Which to choose, the carrot or the stick? (2004) 🗎🗎

Policies to reduce emissions of greenhouse gases such as CO2, will affect the rate and pattern of technological change in alternative energy supply and other production processes. Imperfections in markets for non-polluting technologies imply that a decentralised economy does not deliver a socially optimal outcome, and this could justify policy interventions such as subsidies. This paper considers the welfare effects of technology subsidies as part of a carbon abatement policy package. We argue that the presence of spillovers in alternative energy technologies does not necessarily imply that subsidy policies are welfare improving. We illustrate this point in the context of a general equilibrium model with two forms of carbon-free energy, an existing "alternative energy" which is a substitute for carbon-based fuels, and "new vintage energy" which provides a carbon-free replacement for existing energy services. Subsidisation of alternative energy on the grounds of spillover effects can be welfare-worsening if it crowds-out new vintage technologies.

On the virtues of multilateral trade negotiations (2005) 🗎🗎

Phasing out distortionary government subsidies and barriers to international trade will yield extraordinarily high benefits relative to any adjustment costs, notwithstanding the considerable reforms that have already taken place over the past two decades. The present paper surveys recent estimates, using global economy-wide simulation models, of the benefits of reducing remaining distortions by means of unilateral reform, multilateral trade negotiations and preferential trading arrangements. Distortionary trade policies harm most the economies imposing them, but the worst of them (in agriculture and clothing) are particularly harmful to the world's poorest people. Opportunities to reduce remaining distortions, including by means of the WTO's Doha Development Agenda as compared with subglobal preferential reform, are examined, before drawing out the implications of liberalisation for poverty and the environment.

Methane and nitrous oxide emissions from agriculture in the EU: A spatial assessment of sources and abatement costs (2005) 🗎🗎

Agriculture significantly contributes to emissions of greenhouse gases in the EU. By using a farm-type, supply-side oriented, linear-programming model of the European agriculture, the baseline levels of methane and nitrous oxide emissions are assessed at the regional level in the EU-15. For a range of CO2-equivalent prices, we assess the potential abatement, as well as the resulting optimal mix of emission sources in the total abatement. Furthermore, we show that the spatial variability of the abatement achieved at a given carbon price is large, indicating that abatement cost heterogeneity is a fundamental feature in the design of a mitigation policy. The cost savings permitted by market-based instruments relative to uniform standard are shown to be large.

Energy-related taxation as an environmental policy tool-the Finnish experience 1990-2003 (2005) 🗎🗎

Finland has over 10 years experience of environment-based energy taxation. The design and level of the CO2 and energy tax scheme has been changed several times on an ad hoc basis. In recent years, Finland has introduced more and more tax "departures", i.e. deviations and exceptions from an "ideal" type of environmental tax. Examples of this include fuel-specific and user-specific exemptions or lowered tax levels taxes on electricity production from non-fossil energy sources, plus refund systems for fossil fuel and electricity users. Thus, it is apparent that Finnish energy taxation aimed at improving the environment has developed ineffectively. Increases in the level of CO2 tax on fossil fuels have served mostly fiscal purposes with reduced CO2 emissions being only a side benefit. No systematic follow-up or ex post analysis on the impacts of the CO2 and energy taxes has been carried out. From the perspective of greenhouse gas mitigation, the discussion on economic instruments has shifted from CO2 taxation towards emissions trading in the international context of the European Union and the Kyoto Protocol. (c) 2004 Elsevier Ltd. All rights reserved.

Export processing zones in Madagascar: a success story under threat? (2005) 🗎🗎

The success of export processing zones or the Zone Franche in Madagascar since 1990 is, with the exception of Mauritius, an isolated and unknown case in Africa. This paper, based on first-hand data, explains that the Zone Franche has had a highly significant macroeconomic impact in terms of exports and jobs. We show that average wages in the Zone Franche are equivalent to the other formal activity sectors, other things being equal, and that labor standards there are higher than average. The Zone Franche quickly recovered from the 2002 crisis and has benefited a great deal from AGOA. The final phase-out of the Multi-Fibre Arrangement in 2005 is expected to have a negative impact on the Zone Franche. (c) 2005 Elsevier Ltd. All rights reserved.

Should Russia increase domestic prices for natural gas? (2006) 🗎🗎

Previous analyses of Russia's dual pricing system and hidden subsidies for natural gas, have neglected to assess the dual pricing system as a domestic environmental policy. If dual pricing is considered as a policy to reduce conventional air pollutants, it is more than economically justified in Russia oil the basis of avoided health risks. In the short term, the substitution of coal for natural gas may result in significant additional human health risk, which translates into economic damage. An alternative abatement possibility is expensive and unlikely enforceable, due to weak environmental regulation. The authors conclude that while the price differential can be expected to diminish over time, as Russia increasingly moves to a market economy, in the near-term, dual pricing of natural gas remains the most efficient environmental policy for Russia. (c) 2005 Elsevier Ltd. All rights reserved.

The enlargement of the European Union: Effects on trade and emissions of greenhouse gases (2006) 🗎🗎

With the gradual accession of various Central and Eastern European Countries (CEECs) to the European Union (EU), international trade between the EU and the CEECs will change as a result of trade liberalisation and the mobility of production factors within the EU. The EU and most of the CEECs have already committed themselves to reduce by 2008-2012 their emissions of greenhouse gases (GHGs) by 8% compared to the 1990 level. This paper reports on an investigation of the potential consequences of the enlargement of the EU and of the emission reduction target set by the Kyoto Protocol on the sectoral production patterns and international trade. A comparative-static general equilibrium model was developed to examine the impacts under different scenarios. For illustrative purposes, two regions (the EU and the CEECs) and three categories of goods and services (agricultural goods, industrial goods, and services) were included. The model was calibrated by the 1998 data. The model was subsequently applied to study the effects of free trade, the mobility of factors and the environmental constraints on production and international trade in light of the enlargement of the EU. We show that in this specific context, free trade is beneficial to economic welfare and does not necessarily increase emissions of greenhouse gases. The mobility of factors also increases economic welfare, but in the case of fixed production technology it may harm the environment through more emissions of GHGs. (c) 2005 Published by Elsevier B.V.

Trade liberalisation and greenhouse gas emissions: the case of dairying in the European Union and New Zealand (2006) 🗎🗎

The link between trade and the environment has aroused considerable interest both in terms of the impact of trade liberalisation on the environment, and also the impact of environmental policy on production and trade. Of key environmental concern at present is global warming and its association with greenhouse gas emissions. Agriculture is a sector of the economy that both contributes to, and will be affected by, climate change. This paper models the impact of agricultural trade liberalisation on greenhouse gas emissions from agriculture around the world, focusing particularly on the effects on New Zealand, a small economy highly dependent on agricultural trade. A partial equilibrium agricultural multicountry, multicommodity trade model is used for the analysis, extended to include physical production systems and their greenhouse gas emissions. Two simulations are performed: removal of agricultural policies in the EU and in all OECD countries. The results indicate that although producer returns in New Zealand increase, greenhouse gas emissions also increase significantly. EU producers face lower returns but also lower greenhouse gas emissions.

Designing environmental policy: lessons from the regulation of mercury emissions (2006) 🗎🗎

In its waning days, the Clinton administration decided that it was appropriate to regulate mercury emissions from power plants. The incoming Bush administration had to decide how best to regulate these emissions. The Bush administration offered two approaches for regulating mercury emissions from power plants. The first was to establish uniform emission rates across utilities, as mandated by the 1990 Amendments. The second was to establish a cap on mercury emissions while allowing emissions trading in order to reduce the cost of achieving the goal. This paper presents the first cost-benefit analysis of this issue that takes account of IQ benefits. We find that the benefits of the mercury regulation are likely to fall short of the cost. This assessment is based on a number of assumptions that are highly uncertain. The finding of negative net benefits is robust to many, though not all, reasonable variations in the model assumptions. We also find that the emissions trading proposal is roughly $15 billion less expensive than the command-and-control proposal.

Impacts of Novel Protein Foods on sustainable food production and consumption: Lifestyle change and environmental policy (2006) 🗎🗎

We analyse the impacts of a change in consumers' preference for Novel Protein Foods (NPFs), i.e. a lifestyle change with respect to meat consumption, and the impacts of environmental policies e.g. tradable emission permits for greenhouse gases (GHGs) or an EU ammonia (NH3) emission bound per hectare. For our analysis we use a global applied general equilibrium (AGE) model that includes consumers' lifestyle change, different production systems, emissions from agricultural sectors, and an emission permits system. Our study leads to the following conclusions. Firstly, more consumption of NPFs assists in reducing global agricultural emissions of methane (CH4), nitrous oxides (N2O) and NH3. However, because of international trade, emission reduction does not necessarily occur in the regions where more NPFs are consumed. Secondly, through lifestyle change of the 'rich', the emission reduction is not substantial because more 'intermediate' consumers will increase their meat consumption. Finally, for the same environmental target the production structure changes towards less intensive technologies and more grazing under environmental policy than under lifestyle change.

Investments in global warming mitigation: The case of "activities implemented jointly" (2006) 🗎🗎

This paper examines bilateral cooperation between developed countries (home country) and developing countries (host country) to reduce greenhouse gas emissions and to enhance carbon dioxide sinks. With the home-host country pair as the unit of analysis, our logistic regression model examines 158 Activities Implemented Jointly (AIJ) investment projects from 1993 until 2002 across 2541 country-pairs. Because the marginal costs of reducing emissions may be lower in developing countries, the AIJ projects served as a policy laboratory to assess whether such investments might be advantageous to both countries in the event future regimes allowed emission credits from such bilateral projects. Instead of investing in home countries where maximum pollution reductions (or carbon sequestration) might be possible, home countries invest in locations where they can conduct their policy experiments at low transaction costs. Prior trade and aid relationships were used as a proxy. Regarding energy projects, location decisions are driven by home countries' desire to reduce air pollution that they receive from abroad. Geography - proximity of a host country to a home country - in interaction with host country's coal production, is a very important driver of location decision in AIJ energy sector projects. Location of sequestration projects is impacted by the host country's potential for avoiding deforestation as well as by previous aid and trade patterns between a home and a host country. Proximity is not important in this case.

International emissions trading and induced carbon-saving technological change: Effects of restricting the trade in carbon rights (2006) 🗎🗎

This paper examines the implications of restricting the tradability of carbon rights in the presence of induced technological change. Unlike earlier approaches aimed at exploring the tradability-technology linkage, we focus on climate-relevant "carbon-saving" technological change. This is achieved by incorporating endogenous investment in carbon productivity into the RICE-99 integrated assessment model of Nordhaus and Boyer (2000). Simulation analysis of various emission reduction scenarios with several restrictions on emissions trading reveals a pronounced dichotomy of effects across regions: Restrictions to trading raise the investments in carbon productivity in permit demanding regions while reducing them in permit supplying regions. In terms of per capita consumption, permit demanding regions lose and permit supplying regions gain from restrictions. In scenarios that involve "hot air," restrictions to trade lower overall emissions, which results in reduced climate damage for most regions. Reduced damage, in turn, reduces the incentive to invest in carbon productivity.

How do market reforms affect China's responsiveness to environmental policy? (2007) 🗎🗎

A large percentage of total investment in China is allocated by the central government at below-market interest rates in pursuit of non-economic objectives. This has resulted in low rates of return and a high number of non-performing loans, threatening the future health of the Chinese economy. As a result, reform of capital markets is a high priority of the Chinese government. At the same time, the country is implementing various environmental policies to deal with serious pollution issues. In this paper we ask how reforms of the capital market will affect the functioning of a carbon tax. This allows us to assess how China's willingness to join global efforts to reduce carbon emissions is influenced by China's current efforts to reduce investment subsidies. We compare the costs of a carbon tax in a reformed economy with the costs of a carbon tax in the current subsidized economy. We find that in the subsidized economy the tax-interaction effect dampens the effect of a carbon tax resulting in smaller reductions in emissions than what would result in a reformed economy. Importantly, we also find that the effect on economic welfare from a carbon tax is lower in the subsidized economy; in fact, for lower levels of reductions, the carbon tax is actually welfare improving. These results have important implications for an economy undergoing economic transition. The carbon tax rate required to achieve a certain level of emission reductions will be higher in an economy with capital subsidies. However, the welfare implications of the tax indicate that the current system with capital subsidies is highly distorting implying that there is a high efficiency cost for the non-economic objectives the government is pursuing by maintaining this system of subsidies. (c) 2005 Elsevier B.V. All rights reserved.

Trading away damage: Quantifying environmental leakage through consumption-based, life-cycle analysis (2007) 🗎🗎

This research quantifies the extent to which the US has shifted the environmental impact associated with the goods it consumes to other countries through trade. To achieve this, we use a life-cycle, consumption-based approach to measure the environmental impacts embodied in US trade activities for global warming potential (GWP), energy, toxics, and the criteria air pollutants. We use these values to determine the amount of environmental impact "leaked" from current, production-based approaches to analyzing national environmental trends for the years 1998-2004. We find that in 2004, with reasonable assumptions about the environmental intensity of imports and exports, this leakage exceeds 10% for all studied impacts, exceeds 20% for GWP, energy, and most criteria air pollutants, and exceeds 80% for lead emissions and toxics. By including the environmental impacts embodied in trade activities into national environmental accounts, we provide consumption-based, US per capita, environmental impacts, which we use to evaluate the relationship between income and environmental impact. We find evidence for rising per capita environmental impacts over time in the US, contra the Environmental Kuznets Curve. The paper concludes with a discussion of the implications for international environmental policy of increasing embodied emissions in trade. (c) 2007 Elsevier B.V. All rights reserved.

AGE analysis of the impact of a carbon energy tax on the Irish economy (2007) 🗎🗎

A computable general equilibrium model with specific detail in taxation and energy use is developed in this paper to quantify the impact of the implementation of energy taxation to reduce carbon dioxide emissions in Ireland. Benchmark data combining physical energy and emissions data and economic data in the form of a Social Accounting Matrix (SAM) had to be compiled from various data sources, because energy and pollution accounts from the SEEA are not available for Ireland. We find that the reduction target for energy related CO2 emissions in Ireland of 25.8% compared to 1998 levels can be achieved with a carbon energy tax of 10-15 euros per tonne of CO2. Though fuel switching is important in meeting the target, this result is more sensitive to the possibilities for producers to substitute away from energy use. Welfare would fall but only by small percentages. Production and consumption patterns would change more significantly, with a shift in demand from fuels with a high emission factor to energy sources with a lower carbon-intensity and from energy to other commodities. This paper confirms that a carbon energy tax leads to greater emission reductions than an equivalent uniform energy tax. The latter has a stronger negative impact on the less polluting energy sectors whereas the carbon tax greatly stimulates the use of renewable energy and reduces the use of peat and coal. The new SAM, the model and the application to energy taxes contribute to a better informed debate on environmental policy in Ireland. (c) 2006 Elsevier B.V. All rights reserved.

Can integrated control strategies for multiple emissions enhance cost-efficiency in environmental policy? Evidence from Sweden (2007) 🗎🗎

The aim of this paper is to clarify the magnitude of the sub-optimization cost associated with separate control strategies for compliance with the Swedish environmental quality objectives. The marginal reduction costs are estimated using a separate and an integrated version of a deterministic linear programming model. To investigate whether the accuracy of the data is decisive for the result of this study, an extensive sensitivity analysis that deals with both the disparity in discount rates in data and the different types of measures, is carried out in four steps. It can be concluded that the results are robust for possible and probable faults in data. The main findings are that there are no substantial sub-optimization costs for separate control strategies for CO2, NOx and SO2, but an integrated action strategy could imply enhanced cost-efficiency in reductions of VOC and particles. (C) 2006 Elsevier Ltd. All rights reserved.

Profitability of fossill-fuel production under different instruments in international climate policies (2007) 🗎🗎

This article discusses how different climate policy instruments such as CO2 taxes and renewable energy subsidies affect the profitability of fossil-fuel production, given that a fixed global climate target shall be achieved in the long term. Within an intertemporal framework, the model analyses show that CO2 taxes reduce the short-term profitability to a greater extent than technology subsidies, since the competition from CO2-free energy sources does not become particularly noticeable until decades later. Due to, for example, the discounting of future revenues, most fossil-fuel producers prefer subsidies to their competitors rather than CO2 taxes. However, this conclusion does not apply to all producers. Oil producers outside OPEC lose the most on the subsidizing of CO2-free energy, while CO2 taxes only slightly reduce their profits. This is connected to OPEC's role in the oil market, as the cartel chooses to reduce its extraction significantly in the tax scenario. The results seem to be consistent with the observed behaviour of important players in the climate negotiations.

Will a kilometre tax in Sweden affect its sawmill industry? A note (2007) 🗎🗎

The paper offers quantitative 'worst case' assessments of expected effects of a kilometre tax in Sweden covering the sawmill industry using available price elasticities. The results, assuming that sawmills pay the whole tax burden, indicate that production losses in the industry would follow the implementation of such a tax. (c) 2007 Elsevier Ltd. All rights reserved.

Biodiesel: A new Oildorado? (2007) 🗎🗎

Guaranteeing tax reductions and exemptions, the European governments intend to increase the share of biofuels in total EU fuel consumption to 5.75% by 2010. The financial support of this EU objective is frequently justified by expected positive environmental impacts, most notably the mitigation of climate change, and by favorable employment effects in the agricultural sector. This paper investigates the environmental and economic implications of the support of rapeseed-based biodiesel as a substitute for fossil diesel. Based on a survey of recent empirical studies, we find that the energy and greenhouse gas balances of this environmental strategy are clearly positive. Yet, it appears to be unclear whether the overall environmental balance is also positive. Most importantly, though, biodiesel is not a cost-efficient emission abatement strategy. Thus, for the abatement of greenhouse gases, we recommend more efficient alternatives based on both renewable and conventional technologies. (c) 2006 Elsevier Ltd. All rights reserved.

Environmental policy and technological input substitution (2007) 🗎🗎

This paper presents a simulation analysis of an environmental policy implemented by a government to introduce CO2 emission permits in its domestic tax system. The aim of the paper is to check the dependence of the macro and microeconomic effects on the firms' technologies after a tax reform involving a cut in the number of permits available. We allow the firms to substitute among inputs, but not to insert other innovations in the production functions. The results indicate the following. First, at macroeconomic level the changes are modest. Second, the main effects are the sectoral adjustments in their intermediate inputs mix. Third, those changes in the intermediate inputs mix would be related to most of the inputs, and not only to energy inputs.

Achieving the G8 50% target: modelling induced and accelerated technological change using the macro-econometric model E3MG (2008) 🗎🗎

This article assesses the feasibility of a 50% reduction in CO2 emissions by 2050 using a large-scale Post Keynesian simulation model of the global energy-environment-economy system. The main policy to achieve the target is a carbon price rising to $100/tCO(2) by 2050, attained through auctioned CO2 permits for the energy sector, and carbon taxes for the rest of the economy. This policy induces technological change. However, this price is insufficient, and global CO2 would be only about 15% below 2000 levels by 2050. In order to achieve the target, additional policies have been modelled in a portfolio, with the auction and tax revenues partly recycled to support investment in low-GHG technologies in energy, manufacturing and transportation, and 'no-regrets' options for buildings. This direct support supplements the effects of the increases in carbon prices, so that the accelerated adoption of new technologies leads to lower unit costs. In addition the $100/tCO(2) price is reached earlier, by 2030, strengthening the price signal. In a low-carbon society, as modelled, GDP is slightly above the baseline as a consequence of more rapid development induced by more investment and increased technological change.

Economics of environmental policy in Turkey: A general equilibrium investigation of the economic evaluation of sectoral emission reduction policies for climate change (2008) 🗎🗎

Research on climate change has intensified on a global scale as evidence on the costs of global warming continues to accumulate. Confronted with such evidence, the European Union set in late 2006 an ambitious target to reduce its greenhouse gas emissions, by 2020, to 20% below the level of 1990; and invited the rest of the developed economies and the developing world to take part with the Kyoto Protocol. Turkey is the only country that appears in the Annex-I list of the United Nations' Rio Summit and yet an official target for CO2 emission reductions has still not been established. Thus, as part of its accession negotiations with the EU, Turkey will likely to face significant pressures to introduce its national plan on climate change along with specific emission targets and the associated abatement policies. Given this motivation, we utilize a computable general equilibrium model for Turkey to study the economic impacts of the intended policy scenarios of compliance with the Kyoto Protocol and we report on the general equilibrium effects of various possible environmental abatement policies in Turkey over the period 2006-2020. The model is in the Walrasian tradition with 10 production sectors and a government operating within an open macroeconomy environment. It accommodates flexible production functions, imperfect substitution in trade and open unemployment. We focus on CO2 emissions and distinguish various basic sources of gaseous pollution in the model. Our results suggest that the burden of imposing emission control targets and the implied abatement costs could be quite high, and that there is a need to finance the expanded abatement investments from scarce domestic resources. Policies for environmental abatement via carbon and/or increased energy taxes further suffer from very adverse employment effects. This suggests that a first-best policy would necessarily call for a simultaneous reduction on the existing tax burden on producers elsewhere together with introduction of environmental taxes. (C) 2007 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

Optimal compliance with emission constraints: dynamic characteristics and the choice of technique (2008) 🗎🗎

The paper analyzes how to comply with an emission constraint, which restricts the use of an established energy technique, given the two options to save energy and to invest in two alternative energy techniques. These techniques differ in their deterioration rates and the investment lags of the corresponding capital stocks. Thus, the paper takes a medium-term perspective on climate change mitigation, where the time horizon is too short for technological change to occur, but long enough for capital stocks to accumulate and deteriorate. It is shown that, in general, only one of the two alternative techniques prevails in the stationary state, although, both techniques might be utilized during the transition phase. Hence, while in a static economy only one technique is efficient, this is not necessarily true in a dynamic economy.

Addressing climate change with a comprehensive US cap-and-trade system (2008) 🗎🗎

There is growing impetus for a domestic US climate policy that can provide meaningful reductions in emissions of carbon dioxide (CO2) and other greenhouse gases. I describe and analyse an up-stream, economy-wide CO2 cap-and-trade system which implements a gradual trajectory of emissions reductions (with inclusion over time of non-CO2 greenhouse gases), and includes mechanisms to reduce cost uncertainty. Initially, half of the allowances are allocated through auction and half through free distribution, with the share being auctioned gradually increasing to 100 per cent over 25 years. The system provides for linkage with emission-reduction credit projects in other countries, harmonization over time with effective cap-and-trade systems in other countries and regions, and appropriate linkage with actions taken in other countries, in order to establish a level playing field among domestically produced and imported products.

Climate policy and the optimal extraction of high- and low-carbon fossil fuels (2008) 🗎🗎

We study how restricting CO2 emissions affects resource prices and depletion over time. We use a Hotelling-style model with two non-renewable fossil fuels that differ in their carbon content (e.g., coal and natural gas) and in addition are imperfect substitutes in final good production. We show that an economy facing a CO2 flow-constraint may substitute towards the relatively dirty input. As the economy tries to maximize output per unit of emissions it is not only carbon content that matters: productivity matters as well. With an announced constraint the economy first substitutes towards the less productive input such that more of the productive input is available when constrained. Preliminary empirical results suggest that it is cost-effective to substitute away from dirty coal to cleaner oil or gas, but to substitute from natural gas towards the dirtier input oil.

What explains the increased utilization of Powder River Basin coal in electric power generation? (2008) 🗎🗎

This article examines possible explanations for increased utilization of Powder River Basin (PRB) coal in electric power generation that occurred over the last two decades. Did more stringent environmental policy motivate electric power plants to switch to less polluting fuels? Or, did greater use of PRB coal occur because relative price changes altered input markets in favor of this fuel. A key finding is that factors other than environmental policy such as the decline in railroad freight rates together with elastic demand by power plants were major contributors to the increased utilization of this fuel.

The effect of uncertainty on pollution abatement investments: Measuring hurdle rates for Swedish industry (2008) 🗎🗎

We estimate hurdle rates for firms' investments in pollution abatement technology, using ex post data. The method is based on a structural option value model where the future price of polluting fuel is the major source of uncertainty facing the firm. The empirical procedure is illustrated using a panel of firms from the Swedish pulp and paper industry, and the energy and heating sector, and their sulfur dioxide emissions over the period 2000-2003. The results indicate that hurdle rates of investment vary from 2.7 to 3.1 in the pulp and paper industry and from 3.4 to 3.6 in the energy and heating sector depending on econometric specification. (C) 2008 Elsevier B.V. All rights reserved.

CO2 embodied in international trade with implications for global climate policy (2008) 🗎🗎

The flow of pollution through international trade flows has the ability to undermine environmental policies, particularly for global pollutants. In this article we determine the CO2 emissions embodied in international trade among 87 countries for the year 2001. We find that globally there are over 5.3 Gt of CO2 embodied in trade and that Annex B countries are net importers Of CO2 emissions. Depending on country characteristics-such as size variables and geographic location-there are considerable variations in the embodied emissions. We argue that emissions embodied in trade may have a significant impact on participation in and effectiveness of global climate policies such as the Kyoto Protocol. We discuss several policy options to reduce the impact of trade in global climate policy. If countries take binding commitments as a part of a coalition, instead of as individual countries, then the impacts of trade can be substantially reduced. Adjusting emission inventories for trade gives a more consistent description of a country's environmental pressures and circumvents many trade related issues. It also gives opportunities to exploit trade as a means of mitigating emissions. Not least, a better understanding of the role that trade plays in a country's economic and environmental development will help design more effective and participatory climate policy post-Kyoto.,

Climate change, innovation and jobs (2008) 🗎🗎

The employment effect of climate policy has emerged as an important concern of policy makers, not least in the USA. Yet the impact of climate policy on jobs is complex. In the short term, jobs will shift from high-carbon activities to low-carbon activities. The net effect could be job creation, as low-carbon technologies tend to be more labour-intensive, at least in the short term until efficiency gains bring down costs. In the medium term, the effect will be felt economy-wide as value chains and production patterns adjust. This effect is more difficult to gauge, particularly if climate policy is unilateral and trade effects have to be taken into account. However, the biggest effect is expected to be long term, when climate policy will trigger widespread structural adjustment. Such episodes of 'creative destruction' are often associated with innovation, job creation and growth.

Dynamic carbon caps. Splitting the bill: A fairer solution post-Kyoto? (2009) 🗎🗎

A dynamic carbon cap scheme is described and illustrated using a future growth scenario. This scheme, called a "bill-splitting dynamic carbon cap," uses national carbon caps that change in a manner designed to distribute burden equitably, and at the same time to encourage and feed off economic growth. This is achieved by distributing emission-reduction obligations away from the growers, and onto the emitters. The global emission-reduction response is thereby pegged to global growth. (C) 2009 Elsevier Ltd. All rights reserved.

Environmental policy, fuel prices and the switching to natural gas in Santiago, Chile (2009) 🗎🗎

In this study I analyzed the role of environmental policies and energy cost savings on the pattern of switching to natural gas by stationary sources in Chile. According to the data most of the switching was induced by the lower cost of natural gas, although environmental policies played a small role and showed that sources were more sensitive to the cost of energy than to the environmental regulation. (C) 2009 Elsevier B.V. All rights reserved.

Environmental Harm of Hidden Subsidies: Global Warming and Acidification (2009) 🗎🗎

We investigate environmental impacts of off-budget or indirect subsidies, which, unlike on-budget subsidies, are not visible in government budgets. Such subsidies have received little attention in economic and environmental research, even though they may be at least as important from an environmental perspective as on-budget subsidies. We offer a typology of indirect subsidies. Next, we estimate the magnitude of these subsidies and their impact on greenhouse gas (GHG) and acidifying emissions for the agriculture, energy, and transport sectors in The Netherlands. The calculations are based on a model approach that translates a particular subsidy into price and quantity changes using empirical elasticities, followed by environmental effect estimates using pollution-intensity parameters. The various environmental pollution effects are aggregated into environmental indicators. The results show, among others, that GHG emissions caused by off-budget subsidies contribute to more than 30% of the policy targets specified by the Kyoto Protocol for CO2 emissions reduction by The Netherlands. Reforming or removing off-budget subsidies may thus be an important strategy of effective climate policy.

Effects of the tax on retail sales of some fuels on a regional economy: a computable general equilibrium approach (2009) 🗎🗎

This study simulates the effects on the economy of Extremadura that are produced by a new tax on retail sales of some fuels. A computable general equilibrium model involving various labour market scenarios is employed as a modelling framework. Model parameters are obtained by calibration, using a social accounting matrix for Extremadura updated to the year 2000. Further, we also include an additional simulation in which a hypothetical regional tax rate, to finance environmental policies, is considered. This second simulation assumes constant fiscal revenues. The results of the first simulation show that the effects of this tax are modest. The simulation shows household welfare losses, decreasing activity levels and generalised price reductions, except in production sectors more directly linked to the oil products sector. In addition, we also observe that this hypothetical additional regional fuel tax rate would reinforce the effects produced by the national tax rate.

The effect of the German and British environmental taxation reforms: A simple assessment (2009) 🗎🗎

This article implements a simple econometric approach to assess the effect of the environmental tax reforms introduced in Germany and the UK. Despite the very simple econometric approach adopted in this paper, in the case of the energy demand, our results do not differ markedly from those obtained from complicated multi-sectoral econometric models. In the case of the labour demand, our results differ from the estimates obtained from econometric models where the employment level is not directly influenced by the energy price. On the other hand, our results are more similar to those obtained from models where the level of employment is directly influenced by the energy price. Confirming the findings of Bosquet [2000. Environmental tax reform: does it work? A survey of the empirical evidence. Ecological Economics 34, 19-32] and OECD [2004. Environment and Employment: An Assessment Working Party on National Environmental Policy OECD, Paris], we conclude that environmental tax reforms can deliver substantial reductions in energy consumption while having small effects on the level of employment, effect which can be positive, depending on the size of the reduction in the labour costs and the value of cross-price elasticities. (C) 2009 Elsevier Ltd. All rights reserved.

Nitrogen and sulphur outcomes of a carbon emissions target excluding traded allowances - The Swedish case 2020 (2009) 🗎🗎

Sweden's current climate policy affects domestic combustion of fossil fuels and, thus, produces synergies on the policies aiming at reducing NOx and SO2 emissions. A matter of climate policy recently discussed by the Swedish Government, however. is to adopt a carbon emissions target, which excludes traded CO2 allowances. Although, this redefined carbon emissions target could be attained at the least costs through emissions trading, it will obstruct the ancillary benefits of reduced SO2 and NOx emissions arising from the current climate policy. The findings, here, suggest that additional policy instruments would have to decrease the SO2/GDP and NOx/GDP ratios by 48 and 72%, respectively for the 2020 carbon emissions target, in order to counteract the obstruction of ancillary benefits. Here, the emission multipliers of carbon emissions trading sectors distinguish from those of non-trading sectors when introduced into the interindustry model and applied to official emissions projections in examining the nitrogen and sulphur outcomes of Sweden's climate policy for 2020. (C) 2009 Elsevier B.V. All rights reserved.

Impact of cap-and-trade policies for reducing greenhouse gas emissions on US households (2009) 🗎🗎

Proposals being considered by the U.S. Congress would establish a cap-and-trade system to cut greenhouse gas (GHG) emissions approximately 2% annually through 2050. Past cap-and-trade policies for other pollutants have distributed allowances free to the regulated companies, leaving consumers uncompensated for passed-through costs needed to achieve the required reductions. Social equity concerns were not a major issue because the total costs were relatively small. However, Americans currently spend about $1 trillion/year on energy, directly and indirectly via the goods and services they consume. If a cap on carbon emissions results in significant increases in energy prices, social equity concerns could quickly dominate the debate over climate policy. This paper confirms earlier studies that a traditional cap-and-trade policy is regressive and would cause the cost of reducing GHG emissions to fall disproportionately on low income households. This paper explores ways to ameliorate those effects, using highly disaggregated data available on consumer expenditures and energy-input-output analyses of the U.S. economy. Emissions are estimated based on direct and embodied energy use at the household level. Social equity concerns are taken into account and the consequences of cap-and-trade policies are assessed by quantifying the extent to which the expenditure patterns of the poor are significantly more energy intensive than those of the rich. (C) 2009 Elsevier B.V. All rights reserved.

Analyzing Macroeconomic Effects of Environmental Taxation in the Czech Republic with the Econometric E3ME Model (2009) 🗎🗎

Market-based instruments have gradually become a significant tool of environmental policy in central European countries. By using the structural macroeconometric E3ME model we compare two alternative green tax based policy frameworks in the Czech Republic. While the first imposes a tax on emissions of classical pollutants (particulates, sulphur dioxide, nitrous oxides, and volatile organic compounds), the second consists of carbon taxation intentionally set at the level equalizing environmental effect measured by externalities that are avoided as result of both reductions in emissions subject to taxation and ancillary effects. We also analyze impacts of revenue recycling. The comparison of economic impacts of both considered policy set lips indicates that policy aimed at the taxation of classical pollutants outperforms carbon policies in cases without revenue recycling. On the other hand, mainly due to significantly higher revenues from carbon taxation, when the revenues are recycled, a carbon taxation framework appears to be a better option.

Peak globalization: Climate change, oil depletion and global trade (2009) 🗎🗎

The global trade in goods depends upon reliable, inexpensive transportation of freight along complex and long-distance supply chains. Global warming and peak oil undermine globalization by their effects on both transportation costs and the reliable movement of freight. Countering the current geographic pattern of comparative advantage with higher transportation costs, climate change and peak oil will thus result in peak globalization, after which the volume of exports will decline as measured by ton-miles of freight. Policies designed to mitigate climate change and peak oil are very unlikely to change this result due to their late implementation, contradictory effects and insufficient magnitude. The implication is that supply chains will become shorter for most products and that production of goods will be located closer to where they are consumed. (C) 2009 Elsevier B.V. All rights reserved.

On the potential economic costs of cutting carbon dioxide emissions in Portugal (2010) 🗎🗎

The objective of this paper is to estimate the impact of reducing carbon dioxide emissions from fossil fuel combustion activities on economic activity in Portugal. We find that energy consumption has a significant impact on macroeconomic activity. In fact, a 1 ton of oil equivalent permanent reduction in aggregate energy consumption reduces output in the long term by a,not sign6,340. More importantly, and since carbon dioxide emissions are linearly related to the amounts of fuel consumed, our results allow us to estimate the costs of reductions in carbon dioxide emissions. We estimate that a uniform standard for reducing carbon dioxide emissions from fossil fuel combustion activities would lead to a marginal abatement cost of a,not sign95.74 per ton of carbon dioxide. This is a first rough estimate of the potential economic costs of policies designed to reduce carbon dioxide emissions. At this level one may conclude that uniform, across the board reductions in carbon emissions would have a clear negative effect on economic activity. Hence, at the aggregate level there is clear evidence for a trade-off between economic performance and a reduction in carbon emissions. This opens the door to the investigation of the scope for policy to minimize the costs of environmental policy and regulation.

Analysis of policies to reduce oil consumption and greenhouse-gas emissions from the US transportation sector (2010) 🗎🗎

Even as the US debates an economy-wide CO2 cap-and-trade policy the transportation sector remains a significant oil security and climate change concern. Transportation alone consumes the majority of the Us's imported oil and produces a third of total US Greenhouse-Gas (GHG) emissions. This study examines different sector-specific policy scenarios for reducing GHG emissions and oil consumption in the US transportation sector under economy-wide CO2 prices. The 2009 version of the Energy Information Administration's (EIA) National Energy Modeling System (NEMS), a general equilibrium model of US energy markets, enables quantitative estimates of the impact of economy-wide CO2 prices and various transportation-specific policy options. We analyze fuel taxes, continued increases in fuel economy standards, and purchase tax credits for new vehicle purchases, as well as the impacts of combining these policies. All policy scenarios modeled fail to meet the Obama administration's goal of reducing GHG emissions 14% below 2005 levels by 2020. Purchase tax credits are expensive and ineffective at reducing emissions, while the largest reductions in GHG emissions result from increasing the cost of driving, thereby damping growth in vehicle miles traveled. (C) 2009 Elsevier Ltd. All rights reserved.

The Social Costs and Benefits of Biofuels: The Intersection of Environmental, Energy and Agricultural Policy (2010) 🗎🗎

The efficacy of alternative biofuel policies in achieving energy, environmental and agricultural policy goals is assessed using economic cost-benefit analysis. Government mandates are superior to consumption subsidies, especially with suboptimal fuel taxes and the higher costs involved with raising tax revenues. But subsidies with mandates cause adverse interaction effects; oil consumption is subsidized instead. This unique result also applies to renewable electricity that faces similar policy combinations. Ethanol policy can have a significant impact on corn prices; if not, inefficiency costs rise sharply. Ethanol policy can increase the inefficiency of farm subsidies and vice-versa. Policies that discriminate against trade, such as production subsidies and tariffs, can more than offset any benefits of a mandate. Sustainability standards are ineffective and illegal according to the WTO, and so should be re-designed.

The logic of collective action and Australia's climate policy (2010) 🗎🗎

We analyse the long-term efficiency of the emissions target and of the provisions to reduce carbon leakage in the Australian Government's Carbon Pollution Reduction Scheme, as proposed in March 2009, and the nature and likely cause of changes to these features in the previous year. The target range of 5-15 per cent cuts in national emission entitlements during 2000-2020 was weak, in that on balance it is too low to minimise Australia's long-term mitigation costs. The free allocation of output-linked, tradable emissions permits to emissions-intensive, trade-exposed (EITE) sectors was much higher than proposed earlier, or shown to be needed to deal with carbon leakage. It plausibly means that EITE emissions can rise by 13 per cent during 2010-2020, while non-EITE sectors must cut emissions by 34-51 per cent (or make equivalent permit imports) to meet the national targets proposed, far from a cost-effective outcome. The weak targets and excessive EITE assistance illustrate the efficiency-damaging power of collective action by the 'carbon lobby'. Resisting this requires new national or international institutions to assess lobby claims impartially, and more government publicity about the true economic importance of carbon-intensive sectors.

The Effects of Domestic Climate Change Measures on International Competitiveness (2010) 🗎🗎

(1286) Hiau Looi Kee, Hong Ma and Muthukumara Mani Under the Kyoto Protocol, industrialised countries (called Annex I countries) have to reduce their combined emissions to 5 per cent below 1990 levels in the first commitment period of 2008-12. Efforts to reduce emissions to meet Kyoto targets and beyond have raised issues of competitiveness in countries that are implementing these policies, as well as fear of leakage of carbon-intensive industries to non-implementing countries. This has also led to proposals for tariff or border tax adjustments to offset any adverse impact of capping CO(2) emissions. In this paper we examine the implications of climate change policies such as carbon tax and energy efficiency standards on competitiveness across industries, as well as issues related to leakage, if any, of carbon-intensive industries to developing countries. Though competitiveness issues have been much debated in the context of carbon taxation policies, the study finds no evidence that industries' competitiveness is affected by carbon taxes. In fact, the analysis suggests that exports of most energy-intensive industries increase when a carbon tax is imposed by the exporting countries, or by both importing and exporting countries. This finding gives credence to the initial assumption that recycling the taxes back to the energy-intensive industries by means of subsidies and exemptions may be overcompensating for the disadvantage to those industries. There is, however, no conclusive evidence that supports relocation (leakage) of carbon-intensive industries to developing countries due to stringent climate change policies.

Household consumption, associated fossil fuel demand and carbon dioxide emissions: The case of Greece between 1990 and 2006 (2010) 🗎🗎

This paper explores how Greece's household consumption has changed between 1990 and 2006 and its environmental implications in terms of fossil fuel demand and carbon dioxide (CO2) emissions. The results show that the 44% increase in Greece's household expenditure between 1990 and 2006 was accompanied by a 67% increase in fossil fuel demand. Of this total, indirect demand accounted for approximately 60% throughout the 16-year period, increasing by 56% overall, whereas direct fossil fuel demand grew by 80%. The results also show that associated CO2 emissions increased by 60%, resulting in a "relative decoupling" from energy demand. This relative decoupling is shown to be due to fossil fuel mix changes from the supply side rather than action from consumers. These insights highlight the opportunities for demand-side policies to further reduce fossil fuel demand and CO2 emissions, allowing Greece to set more proactive and ambitious post-Kyoto targets. (c) 2010 Elsevier Ltd. All rights reserved.

How to design a border adjustment for the European Union Emissions Trading System? (2010) 🗎🗎

Border adjustments are currently discussed to limit the possible adverse impact of climate policies on competitiveness and carbon leakage. We discuss the main choices that will have to be made if the European Union implements such a system alongside the EU ETS. Although more analysis is required on some issues, on others some design options seem clearly preferable to others. First, the import adjustment should be a requirement to surrender allowances rather than a tax. Second, the general rule to determine the amount of allowances per ton imported should be the product-specific benchmarks that the European Commission is currently elaborating for a different purpose (i.e. to determine the amount of free allowances). Third, this obligation should apply when the imported product is registered at the EU border, and not after the end of the year as is the case for domestic emitters. Fourth, the export adjustment should take the form of a rebate on the amount of allowances a domestic emitter has to surrender. Five, this rebate should equal the above-mentioned product-specific benchmarks, not the emissions of the particular exporting plant or firm. Finally, the adjustment does not have to apply to consumer products but mostly to basic products. (C) 2010 Elsevier Ltd. All rights reserved.

Impacts of climate policy on the competitiveness of Canadian industry: How big and how to mitigate? (2010) 🗎🗎

Competitiveness concerns have been at the forefront of climate policy debates in Canada particularly as a result of its high energy intensity and significant exposure to international markets. This paper uses a dynamic computable general equilibrium model to assess the likely impacts on sectoral competitiveness that would accompany efforts to meet greenhouse gas mitigation targets that have been set by the Canadian government. Additionally, it evaluates several design mechanisms that could be used to reduce the negative competiveness impacts associated with adoption of domestic climate policies. The analysis suggests that several sectors would likely face significant competiveness challenges under a reference scenario in which permits are given to emitters in lump sum. However, it finds that competiveness impacts can be minimized by using output-based recycling of permits, or by using border tax adjustments. (C) 2010 Elsevier B.V. All rights reserved.

SO2 policy and input substitution under spatial monopoly (2010) 🗎🗎

Following the U.S. Clean Air Act Amendments of 1990. electric utilities dramatically increased their utilization of low-sulfur coal from the Powder River Basin (PRB). Recent studies indicate that railroads hauling PRB coal exercise a substantial degree of market power and that relative price changes in the mining and transportation sectors were contributing factors to the observed pattern of input substitution. This paper asks the related question: To what extent does more stringent SO2 policy stimulate input substitution from high-sulfur coal to low-sulfur coal when railroads hauling low-sulfur coal exercise spatial monopoly power? The question underpins the effectiveness of incentive-based environmental policies given the essential role of market performance in input, output, and abatement markets in determining the social cost of regulation. Our analysis indicates that environmental regulation leads to negligible input substitution effects when clean and dirty inputs are highly substitutable and the clean input market is mediated by a spatial monopolist. (C) 2009 Elsevier B.V. All rights reserved.

Emission intensity in New Zealand manufacturing and the short-run impacts of emissions pricing (2010) 🗎🗎

This paper reports the greenhouse gas (GHG) emission intensity of the New Zealand (NZ) manufacturing sector at a combination of industry group and class levels (sub-sectors) The short-run impacts of a price on emissions are investigated with a focus on exporting activities. Sub-sectors that could be materially impacted by an expected range of emissions prices accounted for slightly over 9% of national gross domestic product It is found that there is much variability of emission intensity within manufacturing and even within sub-sectors An assessment of trade intensities further indicates that several emissions-intensive activities are also export-intensive These activities are at most risk of losing competitiveness in the short-run if they are subjected to a price on GHG emissions that their competitors in other countries are not Emissions reduction policies must take account of trade competitiveness imperatives if NZ is to meet its international GHG emissions target while maintaining manufacturing sector competitiveness. Crown Copyright (C) 2010 Published by Elsevier Ltd All rights reserved.

Sulfur dioxide allowances: Trading and technological progress (2010) 🗎🗎

The US Clean Air Act Amendments introduce an emissions trading system to regulate SO2 emissions. This study finds that changes in SO2 emissions prices are related to innovations induced by these amendments. We find that electricity-generating plants are able to increase electricity output and reduce emissions of SO2 and NOx from 1995 to 2007 due to the introduction of the allowance trading system. However, compared to the approximate 8% per year of exogenous technological progress, the induced effect is relatively small, and the contribution of the induced effect to overall technological progress is about 1-2%. (C) 2009 Elsevier B.V. All rights reserved.

Is fuel-switching a no-regrets environmental policy? VAR evidence on carbon dioxide emissions, energy consumption and economic performance in Portugal (2010) 🗎🗎

The objective of this paper is to estimate the impact of carbon dioxide emissions from fossil fuel combustion activities on economic activity in Portugal in order to evaluate the economic costs of policies designed to reduce carbon dioxide emissions. We find that energy consumption has a significant impact on macroeconomic activity. In fact, a one ton of oil equivalent permanent reduction in aggregate energy consumption reduces Output by (sic)6340 over the long term. an aggregate impact which hides a wide diversity of effects for different fuel types. More importantly, and since carbon dioxide emissions are linearly related to the amounts of fuel consumed, Our results allow us to estimate the costs of reductions in carbon dioxide emissions from different energy sources. We estimate that marginal abatement costs for carbon dioxide are (sic)45.62 per ton of carbon dioxide per year for coal, (sic)66.52 for oil, (sic)91.07 for gas, (sic)191.13 for electricity and (sic)254.23 for biomass. An important policy implication is that, once the overall economic costs of reducing carbon dioxide emissions are considered, fuel switching is a no-regrets environmental policy capable of reducing carbon dioxide emissions without jeopardizing economic activity and indeed with the potential for generating favorable economic outcomes. (C) 2009 Elsevier B.V. All rights reserved.

Understanding the effect of an emissions trading scheme on electricity generator investment and retirement behaviour: the proposed Carbon Pollution Reduction Scheme (2010) 🗎🗎

The objective of a greenhouse gas (GHG) emissions trading scheme (ETS) is to reduce emissions by transitioning the economy away from the production and consumption of goods and services that are GHG intensive. A GHG ETS has been a public policy issue in Australia for over a decade. The latest policy initiative on an ETS is the proposed Carbon Pollution Reduction Scheme (CPRS). A substantial share of Australia's total GHG reduction under the CPRS is expected to come from the electricity generation sector. This paper surveys the literature on investment behaviour under an ETS. It specifically focuses on the relationship between the design of an ETS and a generator's decisions to invest in low emissions plant and retire high emissions plant. The proposed CPRS provides the context for presenting key findings along with the implications for the electricity generation sector's transition to lower emissions plant. The literature shows that design features such as the method of allocating permits, the stringency of the emissions cap along with permit price uncertainty, provisions for banking, borrowing and internationally trading permits, and the credibility of emissions caps and policy uncertainty may all significantly impact on the investment and retirement behaviour of generators.

Modelling preferential sugar imports of the EU: a spatial price equilibrium analysis (2010) 🗎🗎

A spatial price equilibrium model with a large coverage of countries, policies and regional trade arrangements is applied to simulate preferential sugar imports of the European Union (EU) in 2015/16 under different assumptions with respect to the expansion of the sugar sectors of various least developed countries in order to benefit from unlimited EU market access. These are analysed under three different policy settings: a continuation of current policies, except for export refunds which are phased out by 2013, a continuation of current policies including export refunds and finally a World Trade Organisation agreement. Preferential imports are estimated to clearly exceed current estimates by the European Commission. In all scenarios, however, they are not found to threaten the reference price of the new Common Market Organisation.

Views on peak oil and its relation to climate change policy (2010) 🗎🗎

Definitions of fossil fuel reserves and resources and assessed stock data are reviewed and clarified. Semantics explain a large stake of conflict between advocate and critical voices on peak oil. From a holistic sources-sinks perspective, limited carrying capacity of atmospheric sinks, not absolute scarcity in oil resources, will impose tight constraints on oil use. Eventually observed peaks in oil production in nearby years will result from politically imposed limits on carbon emissions, and not be caused by physical lack of oil resources. Peak-oil belief induces passive climate policy attitudes when suggesting carbon dioxide emissions will peak naturally linked to dwindling oil supplies. Active policies for reducing emissions and use of fossil fuels will also encompass higher energy end-use prices. Revenues obtained from higher levies on oil use can support financing energy efficiency and renewable energy options. But when oil producers charge the higher prices they can pump new oil for many decades, postponing peak oil to occur while extending carbon lock-in. (C) 2010 Elsevier Ltd. All rights reserved.

A dynamic general equilibrium analysis on fostering a hydrogen economy in Korea (2010) 🗎🗎

Hydrogen is anticipated to become one of the major alternative energy technologies for a sustainable energy system. This study analyzes the dynamic economic impacts of building a hydrogen economy in Korea employing a dynamic Computable General Equilibrium (CGE) model. As a frontier technology, hydrogen is featured as having a slow diffusion rate due to option value, positive externality, resistance of old technology, and complementary vintages. Without government intervention, hydrogen-derived energy will supply up to 6.5% of final energy demand by 2040. Simulation outcomes show that as price subsidy rates increase by 10%, 20%, and 30%, hydrogen demand will increase by 9.2%, 15.2%, and 37.7%, respectively, of final energy demand by 2040. The output of the transportation sector will increase significantly, while demands for oil and electricity will decline. Demands for coal and LNG will experience little change. Household consumption will decline because of the increase of income taxes. Overall GDP will increase because of the increase in exports and investments. CO(2) emission will decline for medium and high subsidy rate cases, but increase for low subsidy cases. Ultimately, subsidy policy on hydrogen will not be an effective measure for mitigating CO(2) emission in Korea when considering dynamic general equilibrium effects. (C) 2009 Elsevier B.V. All rights reserved.

Quota allocation rules in Romania assessed by a dynamic CGE model (2010) 🗎🗎

Alternative mechanisms for EU ETS (European Union Emissions Trading Scheme) quota allocations within the Romanian economy were evaluated using a general equilibrium model within a dynamic intertemporal framework. Several distribution rules were simulated based on: the historical emissions, the least-cost approach, and the auctioning scheme with and without a preliminary selection of eligible sectors. We found that the resulting marginal abatement cost in ETS-eligible sectors is only (sic)5.75/tCO(2), for reducing pollution by 20.7%. Such a low cost is explained by low energy prices and by substitution possibilities with low carbon content resources (nuclear and hydroelectricity). Including all sectors in the trade creates a more flexible market than in the ETS, since more reduction options are available. The ETS has high feasibility for monitoring. All eligible sectors (except refineries and metallurgy) present the lowest abatement costs in the economy. Auctioning introduces a strong carbon price signal, which reduces emission intensity but creates distortions in terms of trade and worsens the country's energy dependency. Environmental policy has modest macroeconomic results and tends to correct the resources allocation. The strong double dividend obtained under certain circumstances indicates Romania's potential for improving its energy efficiency and carbon intensity.

Political Economy Aspects of Climate Change Mitigation Efforts (2011) 🗎🗎

Regardless of the policies used to mitigate climate change, a positive and relatively high price of carbon will have to be established, with slow convergence across regions, leading to huge rents up to capture, way beyond those that have been fought over in the General Agreement on Tariffs and Trade (GATT)-based international trading system. The paper explores the political-economy, feasibility and desirability implications of the two main alternatives, a carbon tax and a cap-and-trade (CAT) system. Having the same concerns, CAT systems in the EU and the US have accounted for different outcomes in each case. Likely leakages under foreseeable carbon prices are estimated to be small and not of an order of magnitude justifying the special allowances sought across a wide spectrum of industries. The experience of the EU and US reviewed here suggests that mitigation is likely to continue to be carried out under a CAT, provided permits are distributed for free to the lobbies whose support is necessary to get adoption of mitigation policies. This quota mechanism, long-used to allocate scarcity in the international trading system both nationally and internationally, would end up with the most powerful receiving the quotas rents, giving them the leverage and resources to maintain allocation schemes favourable to them.

Modelling energy and non-energy substitution: A brief survey of elasticities (2011) 🗎🗎

Estimating the degree of substitution between energy and non-energy inputs is the key for any evaluation of environmental and energy policies. Yet, given the variety of substitution elasticities, the central question arises as to which measure would be most appropriate. Apparently, Allen's elasticities of substitution have been the most-used measures in applied production analysis. In line with Fronde! (2004), this paper argues that cross-price elasticities are preferable for many practical purposes. This conclusion is based on a survey of classical substitution measures, such as those from Allen, Morishima, and McFadden. The survey highlights the fact that cross-price elasticities are their essential ingredients. (C) 2011 Elsevier Ltd. All rights reserved.

Assessing economic impacts of China's water pollution mitigation measures through a dynamic computable general equilibrium analysis (2011) 🗎🗎

In this letter, we apply an extended environmental dynamic computable general equilibrium model to assess the economic consequences of implementing a total emission control policy. On the basis of emission levels in 2007, we simulate different emission reduction scenarios, ranging from 20 to 50% emission reduction, up to the year 2020. The results indicate that a modest total emission reduction target in 2020 can be achieved at low macroeconomic cost. As the stringency of policy targets increases, the macroeconomic cost will increase at a rate faster than linear. Implementation of a tradable emission permit system can counterbalance the economic costs affecting the gross domestic product and welfare. We also find that a stringent environmental policy can lead to an important shift in production, consumption and trade patterns from dirty sectors to relatively clean sectors.

Interaction between Australian carbon prices and energy prices (2011) 🗎🗎

The aim of carbon trading is to encourage reduction in greenhouse gas emissions by rewarding the production of power through green sources and penalising power produced by the higher-emitting sources. This article investigates the long-term interaction between carbon permit prices of the two most heavily traded Australian carbon trading schemes with electricity prices using a structural cointegrated vector autoregression model. This is analysed over two consecutive periods to determine if the scheme effectiveness changes over time. The analysis indicates that only in the second, or most recent, period do carbon prices relate to electricity prices. Our results indicate that some problems with the design of the current schemes, however, do provide some promise of an improvement more recently.

Why a Global Carbon Policy Could Have a Dramatic Impact on the Pattern of the Worldwide Livestock Production (2011) 🗎🗎

The taxation of Greenhouse Gases (GHG) represents an efficient means of achieving climate change mitigation, and this is often the starting point in any discussion of long run global GHG reduction. However, the direct effects of such a tax, or equivalently, an emissions trading scheme, will vary across countries and sectors according to the emissions intensity of the sector. We report, for the first time, estimates of such livestock emissions intensities for all regions of the world and decompose the intensities to understand the sources of regional variation. Our findings indicate that most of the variation is due to differences in the value of output per animal in different regions, which in turn is due to regional differences in output per animal (yield) and dollar per unit output (price). Animals with relatively low annual output values tend to be characterized by higher economic emissions intensities. We find this to be the case in many developing countries. Livestock activity in these high emissions intensity regions are hit especially hard by an emissions tax, resulting in disproportionate reductions in output and consumption in many regions already suffering from malnutrition.

Impacts of regulating greenhouse gas emissions on livestock trade flows (2011) 🗎🗎

Policies regulating greenhouse gas (GHG) emissions are expected to create a significant burden on emitting industries as well as final consumers, which can lead to a strong influence on international trade flows of commodities. This study examines whether the regulation of GHG emissions affects livestock trade flows. A commodity-specific gravity model approach is employed to estimate and test the impact of regulating GHG emissions on livestock trade flows. The results show that regulation of GHG emissions has a negative effect on livestock trade flows from countries restricting GHG emissions to countries without GHG restriction, from restricting countries to restricting countries, and unrestricting countries to restricting countries.

THE COSTS OF MITIGATING CLIMATE CHANGE: AN APPLIED GENERAL EQUILIBRIUM MODELS ANALYSIS (2011) 🗎🗎

This study examines the economic impact of greenhouse gas mitigation in Spain using a dynamic Applied General Equilibrium model. The model captures the main energy and economic interactions and evaluates policies with a broad impact on economic activity. The article focuses on the impacts of the Kyoto Protocol. In order to investigate the costs of mitigation, we focus on key macroeconomic variables, on sectoral variables, energy mix and emission permit prices. Results show that the costs of achieving Kyoto in the long run, although not comparable to any environmental policy from the past, could be contained if a shift toward a less carbon intensive economy is induced; through improvements in energy efficiency, through changes in the energy mix and in production and consumption patterns and, finally, and crucially, through technological innovation.

The role of technological availability for the distributive impacts of climate change mitigation policy (2011) 🗎🗎

The impacts of the availability of low-carbon technologies on the regional distribution of mitigation costs are analyzed in a global multi-regional integrated assessment model. Three effects on regional consumption losses are distinguished: domestic measures, trade of fossil energy carriers and trade of emission permits. Key results are: (i) GDP losses and a redirection of investments in the energy system towards capital-intensive technologies are major contributions to regional consumption losses. (ii) A devaluation of tradable fossil energy endowments contributes largely to the mitigation costs of fossil fuel exporters. (iii) In case of reduced availability of low-carbon technologies, the permit market volume and associated monetary redistributions increase. The results suggest that the availability of a broad portfolio of low-carbon technologies could facilitate negotiations on the permit allocation scheme in a global cap-and-trade system. (C) 2011 Elsevier Ltd. All rights reserved.

Greenhouse Gas Regulation under the Clean Air Act: A Guide for Economists (2011) 🗎🗎

Until recently, most attention to U.S. climate policy has focused on legislative efforts to introduce a price on carbon through cap and trade. In the absence of such legislation, the Clean Air Act is a potentially effective vehicle for achieving reductions in greenhouse gas (GHG) emissions. Decisions regarding existing stationary sources will have the greatest effect on emissions reductions. Although the magnitude of reductions is uncertain, it is plausible that a 10 percent reduction in GHG emissions from 2005 levels could be achieved at moderate costs by 2020. This is comparable to domestic emissions reductions that would have been achieved under the Waxman-Markey legislation. These measures do not include the switching of fuels, which could yield further reductions. The ultimate cost of regulation under the Act hinges on the stringency of standards and the flexibility allowed. A broad-based tradable performance standard is legally plausible and would provide incentives comparable to the proposed legislation, at least in the near term.

The effect of carbon tax on per capita CO2 emissions (2011) 🗎🗎

As the most efficient market-based mitigation instrument, carbon tax is highly recommended by economists and international organizations. Countries like Denmark, Finland, Sweden, Netherlands and Norway were the first adopters of carbon tax and as such, research on the impacts and problems of carbon tax implementation in these countries will provide great practical significance as well as caution for countries that are to levy the tax. Different from the existing studies that adopt the model simulation approaches, in this article, we comprehensively estimate the real mitigation effects of the five north European countries by employing the method of difference-in-difference (DID). The results indicate that carbon tax in Finland imposes a significant and negative impact on the growth of its per capita CO2 emissions. Meanwhile, the effects of carbon tax in Denmark, Sweden and Netherlands are negative but not significant. The mitigation effects of carbon tax are weakened due to the tax exemption policies on certain energy intensive industries in these countries. Notwithstanding, in Norway, as the rapid growth of energy products drives a substantial increase of CO2 emissions in oil drilling and natural gas exploitation sectors, carbon tax actually has not realized its mitigation effects. (C) 2011 Elsevier Ltd. All rights reserved.

Unilateral regulation and greenhouse gas emissions: The case of the Airline Industry (2011) 🗎🗎

This paper provides an analytical framework for investigating the effects of unilateral measures to control greenhouse gas emitted by the aviation industry. It is found that, unilateral efforts might lead to an increase in global greenhouse gas emissions. Furthermore, emissions taxes implemented as part of such measures could lead to larger negative impacts on home than on foreign airlines, possibly resulting in competitive issues. (C) 2011 Elsevier Ltd. All rights reserved.

Improving energy consumption structure: A comprehensive assessment of fossil energy subsidies reform in China (2011) 🗎🗎

Fossil energy subsidies reform would be an effective way to improve the energy consumption structure; however, the reform needs to be assessed comprehensively beforehand as it would exert uncertain impacts on economy, society and environment. In this paper, we use price-gap approach to estimate the fossil energy subsidies of China, then establish CGE model that contains pollutant emissions accounts and CO2 emissions account to stimulate the fossil energy subsidies reform under different scenarios, and the environmental economic analysis concept is introduced to monetize the pollutant reduction benefits. Furthermore, we analyze the possibility and scope of improving the energy consumption structure from the perspective of technical and economic analysis. Analytical results show that the energy consumption structure could be improved by different extent by removing coal or oil subsidies, while the economic and social indexes will be influenced distinctively. Meanwhile, the effects of cutting coal subsidies are more feasible than that of cutting oil subsidies overall. It is recommended to implement fossil energy subsidies gradually, cut the coal first and then cut oil subsidies successively. (C) 2011 Elsevier Ltd. All rights reserved.

Security of supply and retail competition in the European gas market. Some model-based insights (2011) 🗎🗎

In this paper, we analyze the impact of uncertain disruptions in gas supply upon gas retailer contracting behavior and consequent price and welfare implications in a gas market characterized by long-term gas contracts using a static Cournot model. In order to most realistically describe the economical situation, our representation divides the market into two stages: the upstream market that links, by means of long-term contracts, producers in exporting countries (Russia. Algeria, etc.) to local retailers who bring gas to the consuming countries to satisfy local demands in the downstream market. Disruption costs are modeled using short-run demand functions. First we mathematically develop a general model and write the associated KKT conditions, then we propose some case studies, under iso-elasticity assumptions, for the long-short-run inverse-demand curves in order to predict qualitatively and quantitatively the impacts of supply disruptions on Western European gas trade. In the second part, we study in detail the German gas market a the 1980s to explain the supply choices of the German retailer, and we derive interesting conclusions and insights concerning the amounts and prices of natural gas brought to the market. The last part of the paper is dedicated to a study of the Bulgarian gas market, which is greatly dependent on the Russian gas supplies and hence very sensitive to interruption risks. Some interesting conclusions are derived concerning the necessity to economically regulate the market, by means of gas amounts control, if the disruption probability is high enough. (C) 2011 Elsevier Ltd. All rights reserved.

Analysis of the EU policy package on climate change and renewables (2011) 🗎🗎

In 2009 the EU decided to reduce greenhouse gas emissions at least by 20% in 2020 compared to 1990 and to supply 20% of energy needs by 2020 from renewable energy sources. This paper uses an energy model coupled with a non-CO2 greenhouse gas model to assess the range of policy options that were debated to meet both targets. Policy options include trading of renewable targets, carbon trading in power plants and industry and the use of the Clean Development Mechanism to improve cost-efficiency. The models also examined fairness by analysing the distribution of emission reduction in the non-emission trading sector, the distribution of CO2 allowances in the emission trading sector and the reallocation of renewable targets across Member States. The overall costs of meeting both targets range from 0.4% to 0.6% of GDP in 2020 for the EU as a whole. The redistribution mechanisms employed significantly improve fairness compared to a cost-effective solution. (C) 2010 Elsevier Ltd. All rights reserved.

A sectoral decomposition analysis of Turkish CO2 emissions over 1990-2007 (2011) 🗎🗎

At a time of increased international concern and negotiations for greenhouse gas emission reduction, country studies on the underlying effects of greenhouse gas emission growth gain importance. The case of Turkey is particularly interesting due to rapidly growing emissions, accompanied by a political will and actions to reduce the quick growth. The refined Laspeyres method is used in this study to identify factors that accelerate or reduce the increase in Turkish CO2 emissions. A year-by-year decomposition over 1990-2007 is carried out at sectoral level based on disaggregated data that is consistent over time and consistent with international standards. Various interesting results on the underlying effects of sectoral emission growth are found. Valuable insights are gained into CO2 impacts of sectoral policies including energy and emission intensities, fuel switching and activity changes. The results yield important hints for the planning of energy and climate policy. (C) 2011 Elsevier Ltd. All rights reserved.

Reliable in the long run? Petroleum policy and long-term oil supplier reliability (2011) 🗎🗎

Accelerating oil import dependence in energy consuming nations highlights the importance of having energy supplies at sufficient levels and at stable and reasonable prices. Consequently, it is crucial that oil exporters realize their full production potential. Current debates on energy security are often focused on short-term risks e.g. sudden disruptions due to wars, domestic instability, etc. However, when it comes to assessing oil supplier reliability it is equally important to assess their longer term ability and willingness to deliver oil to the global market. This study analyzes the effects of petroleum investment policies on crude oil production trends in 14 major oil producing countries (2000-2010) by focusing on the political-institutional frameworks that shape the investment conditions for the upstream oil sector. Our findings indicate that countries with less favorable oil sector frameworks systematically performed worse than countries with investor friendly and privatized sectors. The findings indicate that assessments based on remaining reserves and planned production capacities alone could inflate expectations about future oil supplies in a world where remaining crude reserves are located in countries with unfavorable investment frameworks. (C) 2011 Elsevier Ltd. All rights reserved.

Weighted Average Cost of Retail Gas (WACORG) highlights pricing effects in the US gas value chain: Do we need wellhead price-floor regulation to bail out the unconventional gas industry? (2011) 🗎🗎

The total annual revenue stream in the US natural gas value chain over the past decade is analyzed. Growth of total revenues has been driven by higher wellhead prices, which peaked in 2008. The emergence of the unconventional gas business was made possible in part by the pre-recessional rise in global energy prices. The general rise in natural gas prices between 1998 and 2008 did not lower overall US gas consumption, but shifts have occurred during the past decade in the consumption levels of individual consumer groups. Industry's gas consumption has decreased, while power stations increased their gas consumption. Commercial and residential consumers maintained flat gas consumption patterns. This study introduces the Weighted Average Cost of Retail Gas (WACORG) as a tool to calculate and monitor an average retail price based on the different natural gas prices charged to the traditional consumer groups. The WACORG also provides insight in wellhead revenues and may be used as an instrument for calibrating retail prices in support of wellhead price-floor regulation. Such price-floor regulation is advocated here as a possible mitigation measure against excessive volatility in US wellhead gas prices to improve the security of gas supply. (C) 2011 Elsevier Ltd. All rights reserved.

Accounting for behavioral effects of increases in the carbon dioxide (CO2) tax in revenue estimation in Sweden (2011) 🗎🗎

In this paper we describe how behavioral responses of carbon dioxide (CO2) tax increases are accounted for in tax revenue estimation in Sweden. The rationale for developing a method for this is a mix between that a CO2 tax is a primary climate policy tool aiming to reduce CO2 emissions and that the CO2 tax generates sizable tax revenues. (C) 2011 Elsevier Ltd. All rights reserved.

Energy transition, carbon dioxide reduction and output growth in the Swedish pulp and paper industry: 1973-2006 (2011) 🗎🗎

This study examines the historical relation between carbon dioxide emission and output growth in the Swedish pulp and paper industry from 1973 to 2006. We find that the industry achieved an 80 percent reduction in carbon dioxide emission, where most of the reduction took place before the implementation of active climate policy in 1991. Foremost energy substitution and also efficiency improvements contributed to the reduction. Growing prices of fossil fuel due to market price change and taxes and subsidies, explains most of the efficiency improvements and substitution. The study finds that energy transformation was coinciding with ongoing structural change in the industry during the 1970s and 1980s as well as a strong period of environmental adaption. We therefore suggest that the oil reduction was reinforced through the dynamics between the energy issue and an overall renewing process of the industry. This suggests a need to coordinate climate and environmental policy measures with the long-term industrial dynamics of structural change. (C) 2011 Elsevier Ltd. All rights reserved.

Environmental and economic effects of the Copenhagen pledges and more ambitious emission reduction targets (2011) 🗎🗎

A multi-region, multi-sector dynamic computable general equilibrium model is applied to explore the economic and welfare effects of the pledges submitted by developed countries (Annex I countries) and major developing (non-Annex I) countries for 2020 under the Copenhagen Accord. In addition to analyzing scenarios reflecting the upper and lower bounds of the Copenhagen Pledges, one additional policy scenario where Annex I countries as a group reduce CO2-emissions by 30% in 2020 compared to 1990 levels, and where major non-Annex I countries reduce CO2 emissions 15% below baseline, is also analyzed. Economic effects are measured as changes in GDP compared to baseline and welfare effects are measured via the equivalent variation. Assuming that countries with emission targets may trade certificates, average reductions in GDP for countries with targets range between 0.1% and 0.7% in 2020 for the policy scenarios. While the GDP losses are larger for major non-Annex I countries with emission targets compared to Annex I countries, this is not the case for the changes in welfare. With the exception of Mexico, the welfare losses for the major non-Annex I regions, as a percentage of projected GDP in 2020, are lower than for the large Annex I countries. (C) 2011 Elsevier Ltd. All rights reserved.

Carbon value dynamics for France: A key driver to support mitigation pledges at country scale (2011) 🗎🗎

The climate agenda in France and several other countries is a complex combination of unilateral commitments with regional and international objectives. When analyzing national policies, the findings of worldwide analyses are of limited accuracy and the large aggregates on which they are built level out most local specificities and inertia. Specific. assessments are hence needed. This paper quantifies the dynamic evolution of carbon values for French climate and energy policy. Its time dependency over successive periods and the effects of setting intermediate targets are evaluated using a long-term optimization model. Addressing critical issues for France, we produce consistent energy, emissions and carbon value estimates with a 5-year time step. Our results are situated above the upper range of carbon value estimates of world models with an overlapping zone. We show that the official policy guideline value is only consistent with an optimistic combination of assumptions. The central estimates are 4 times greater than the guideline carbon value for 2050 and up to 14 times greater in 2020 because of short-term inertia that are costly to move. We also find that with intermediate objectives, the carbon value's dynamic is more than a simple upward curve and that its variability is itself time dependent. (C) 2011 Elsevier Ltd. All rights reserved.

Role of embodied energy in the European manufacturing industry: Application to short-term impacts of a carbon tax (2012) 🗎🗎

Role of energy in the manufacturing industry is a major concern for energy and environmental policy design. Issues like energy prices, security of supply and carbon mitigation are often connected to the industry and its competitiveness. This paper examines the role and consequences of embodied energy in the European industry. To this end, a multi-regional input-output analysis including 59 industrial sectors for all European Union countries and 17 more aggregated industries for other regions of the World is developed. Other segments of the economy are not included. This base is combined with energy consumption, carbon emission as well as bilateral trade data for every sector in all included countries. Our main result is that embodied energy in manufactured products' imports represents a significant aspect of the energy situation in European industries, with quantities close to the direct energy consumption. These flows can further be broken down for detailed analysis at the sector level thanks to the number of distinct industries included. Results demonstrate that an important part of embodied energy inside European products is not concerned with domestic energy price changes. In addition, a European-wide carbon tax would induce an unbalanced burden on industries and countries. (C) 2012 Elsevier Ltd. All rights reserved.

Cost-benefit analysis of a green electricity system in Japan considering the indirect economic impacts of tropical cyclones (2012) 🗎🗎

Global warming is likely to profoundly influence future weather patterns, and one consequence of this is the likelihood of an increase in tropical cyclone intensity. The present paper presents a cost-benefit analysis of introducing significant amounts of green energy in the electricity system in Japan in the light of the economic damage that an increase in tropical cyclone intensity could have on GDP growth between 2010 and 2085. Essentially the passage of a tropical cyclone will result not only in physical damage but also on a decrease in economic productivity due to precautionary cessation of the economic activity, which has an effect on GDP growth. By comparing the economic performance of different electricity system scenarios with the indirect economic damage of tropical cyclones from 2010 to 2085, based on the yearly economic data of green electricity, fossil fuel, GDP and population, it can be seen that the green scenarios are generally a cost-effective way of mitigating the effects of these weather systems, despite the large amount of initial investments necessary. (C) 2011 Elsevier Ltd. All rights reserved.

The economic impact of petroleum royalty reform on Turkey's upstream oil and gas industry (2012) 🗎🗎

The aim of this paper is to examine the economic impact of the royalty reform. The draft Turkish petroleum Law introduces two important fiscal changes to increase to increase domestic petroleum production, further national petroleum supply, attract investors and harmonize its laws with those of the European Community: (1) progressive sliding royalty relief on oil and gas production leases and (2) 50% of the royalty shall be transferred to province where the production lease exists. Results included in this analysis indicate that there would be 2% increase in oil production thanks to 128 oil fields extending economic life and 0.5% increase in gas production thanks to 63 gas fields due to their profitability in the forecasted period. Half of royalty is transferred to low per capita income provinces and tends to contribute distribution of income. However, half of gas royalty is transferred to high income per capita provinces. (C) 2011 Elsevier Ltd. All rights reserved.

Improving NOx Cap-and-Trade System with Adjoint-Based Emission Exchange Rates (2012) 🗎🗎

Cap-and-trade programs have proven to be effective instruments for achieving environmental goals while incurring minimum cost. The nature of the pollutant, however, affects the design of these programs. NOx, an ozone precursor, is a nonuniformly mixed pollutant with a short atmospheric lifetime. NOx cap-and-trade programs in the U.S. are successful in reducing total NOx emissions but may result in suboptimal environmental performance because location-specific ozone formation potentials are neglected. In this paper, the current NOx cap-and-trade system is contrasted to a hypothetical NOx trading policy with sensitivity-based exchange rates. Location-specific exchange rates, calculated through adjoint sensitivity analysis, are combined with constrained optimization for prediction of NOx emissions trading behavior. and post-trade ozone concentrations. The current and proposed policies are examined in a case study for 218 coal-fired power plants. that participated in the NOx Budget Trading Program in 2007. We find that better environmental performance at negligibly higher system-wide abatement cost can be achieved through inclusion of emission exchange rates. Exposure-based exchange rates result in better environmental performance than those based on concentrations.

A literature review of economic studies on carbon pricing and Australian wholesale electricity markets (2012) 🗎🗎

With the ongoing development of Australian anthropogenic climate change mitigation policies, there has been a steady increase in modelling studies undertaken to estimate Australian carbon prices and their impact on existing electricity markets. This article summarises some of the more prominent studies completed by many of Australia's foremost economic modelling firms. We developed a simple approach for testing the consistency of these studies and their findings in relation to carbon pass-through. Unfortunately, we have established that the studies are entirely inconsistent in their estimation of carbon pass-through. Furthermore, we were unable to establish why the estimation of carbon pass-through varies so significantly. This has important implications for policy makers given much of the compensation to be paid to households and businesses under the Clean Energy Future package is predicated on simple assumptions of carbon pass-through. Based upon our analysis of these economic studies, our conclusion is that Australian policy makers are best guided by relying upon the numerous a posteriori estimations of pass-through in the European Union Emissions Trading Scheme (ETS) rather than Australian a priori studies. (C) 2012 Elsevier Ltd. All rights reserved.

Short Term Electric Production Technology Switching Under Carbon Cap and Trade (2012) 🗎🗎

This study examines fuel switching in electricity production following the introduction of the European Union's Emissions Trading System (EU ETS) for greenhouse gas emissions. A short-run restricted cost equation is estimated with carbon permits, high-carbon fuels, and low carbon fuels as variable inputs. Shadow values and substitution elasticities for carbon-free energy resources from nuclear, hydroelectric and renewable sources are imputed from the cost equation. The empirical analysis examines 12 European countries using monthly data on fuel use, prices, and electricity generation during the first phase of the European Emissions Trading System. Despite low emission permit prices, this study finds statistically significant substitution between fossil fuels and carbon free sources of energy for electric power production. Significant substitution between fossil fuels and nuclear energy also was found. Still, while 18 of the 20 substitution elasticities are statistically significant, they are all less than unity, consistent with limited substitution. Overall, these results suggest that prices for carbon emission permits relative to prices for carbon and carbon free sources of energy do matter but that electric power producers have limited operational flexibility in the short-run to satisfy greenhouse gas emission limits.

A literature-based multi-criteria evaluation of the EU ETS (2012) 🗎🗎

This article reviews the existing literature on the European Union Emission Trading Scheme (EU ETS), focusing on empirical ex-post research since the end of the first period (2007). The literature is presented through a multi-criteria evaluation. Concerning environmental effectiveness, despite over-allocation during the first period, abatement is estimated between -2.5% and -5%. Trade-driven carbon leakage was not observed, even if long-term economic models predict divergent leakage estimates for certain at-risk sectors. The abatement target was likely to be below an economically efficient level, but was reached in a fairly cost-effective way, even if free allocation gave rise to several distortional effects. Equity concerns were manifold and constitute a major drawback to the policy. Finally, institutional feasibility can be considered positive in that the EU ETS passed the European legislative process, unlike the previously proposed EU-wide carbon tax. (C) 2012 Elsevier Ltd. All rights reserved.

Does climate policy make the EU economy more resilient to oil price rises? A CGE analysis (2012) 🗎🗎

The European Union has committed itself to reduce greenhouse gas (GHG) emissions by 20% in 2020 compared with 1990 levels. This paper investigates whether this policy has an additional benefit in terms of economic resilience by protecting the EU from the macroeconomic consequences due to an oil price rise. We use the GEM-E3 computable general equilibrium model to analyse the results of three scenarios. The first one refers to the impact of an increase in the oil price. The second scenario analyses the European climate policy and the third scenario analyses the oil price rise when the European climate policy is implemented. Unilateral EU climate policy implies a cost on the EU of around 1.0% of GDP. An oil price rise in the presence of EU climate policy does imply an additional cost on the EU of 1.5% of GDP (making a total loss of 2.5% of GDP), but this is less than the 2.2% of GDP that the EU would lose from the oil price rise in the absence of climate policy. This is evidence that even unilateral climate policy does offer some economic protection for the EU. (C) 2012 Elsevier Ltd. All rights reserved.

What about coal? Interactions between climate policies and the global steam coal market until 2030 (2012) 🗎🗎

Because of economic growth and a strong increase in global energy demand the demand for fossil fuels and therefore also greenhouse gas emissions are increasing, although climate policy should lead to the opposite effect. The coal market is of special relevance as coal is available in many countries and often the first choice to meet energy demand. In this paper we assess possible interactions between climate policies and the global steam coal market. Possible market adjustments between demand regions through market effects are investigated with a numerical model of the global steam coal market: the "COALMOD-World" model. This equilibrium model computes future trade flows, infrastructure investments and prices until 2030. We investigate three specific designs of climate policy: a unilateral European climate policy, an Indonesian export-limiting policy and a fast-roll out of carbon capture and storage (CCS) in the broader context of climate policy and market constraints. We find that market adjustment effects in the coal market can have significant positive and negative impacts on the effectiveness of climate policies. (C) 2012 Elsevier Ltd. All rights reserved.

Oil and gas trends and implications in Malaysia (2012) 🗎🗎

The trends of reserves, production and consumption of oil in Malaysia to meet the ever-increasing demands do not seem to show that oil and gas will be depleted soon, contrary to many reports. Malaysia's net exporter status of oil continues to expand over time for as long as the value of exports is greater than the value of imports. Only in physical quantities of oil that Malaysia's imports exceed exports, but this does not mean that Malaysia will be a net importer by then. Given higher prices of exports, the value of exports outweighs the value of imports. If the current reserves are extracted based on the domestic consumption trend of 1980-2010, Malaysia's reserves will last until 2027 but based on the 1998-2010 trend, the reserves will be depleted by 2035. Malaysia has adopted a four fuel diversification strategy comprising oil, gas, coal and hydro, instead of heavily dependent on oil. Gas has a huge potential for domestic utilization as well as for exports to increase revenues. Malaysia is one of the few countries having many types of renewable energy sources. Malaysia has great potential in biomass utilization as renewable resources mostly from the existing natural forest and planned plantations. (C) 2012 Elsevier Ltd. All rights reserved.

Environmental tax on products and services based on their carbon footprint: A case study of the pulp and paper sector (2012) 🗎🗎

The main aim of this work is to define an environmental tax on products based on their carbon footprint. We examine the relevance of life cycle analysis (LCA) and environmentally extended input-output analysis (EIO) as methodological tools for identifying the emission intensities on which the tax is based. The price effects of the tax and the policy implications of considering non-CO2 greenhouse gases (GHG) are also analyzed. The results from the case study on pulp production show that the environmental tax rate based on LCA (1.8%) is higher than both EIO approaches (0.8 and 1.4% for product and industry, respectively), but they are of the same order of magnitude. Although LCA is more product specific and provides a more detailed analysis, we recommend EIO as a more relevant approach to applying an economy-wide environmental tax. If an environmental tax were applied to non-CO2 GHG instead to CO2 alone, the tax would greatly affects sectors such as agriculture, mining of coal, extraction of peat, and food. Therefore, it is worthwhile for policy-makers to pay attention to the implications of considering either a CO2 tax or a global GHG emissions tax in order to make their policy measures effective and meaningful. (C) 2012 Elsevier Ltd. All rights reserved.

Carbon tariffs on Chinese exports: Emissions reduction, threat, or farce? (2012) 🗎🗎

(1) We estimate CO2 implicitly exported via commodities relative to a region's total emissions: We find - 15% for the industrialized, 12% for the developing region, and 24% for China. (2) We analyze a Contraction and Convergence climate regime in a CGE model including international capital mobility and technology diffusion: When China does not participate in the regime and instead a carbon tariff is imposed on its exports, it will likely be worse off than when participating. This result does not hold for the developing region in general. Meanwhile, the effect on emissions appears small. (C) 2012 Elsevier Ltd. All rights reserved.

Quantitative evaluation of time-series GHG emissions by sector and region using consumption-based accounting (2012) 🗎🗎

This study estimates global time-series consumption-based GHG emissions by region from 1990 to 2005, including both CO2 and non-CO2 GHG emissions. Estimations are conducted for the whole economy and for two specific sectors: manufacturing and agriculture. Especially in the agricultural sector, it is important to include non-CO2 GHG emissions because these are the major emissions present. In most of the regions examined, the improvements in GHG intensities achieved in the manufacturing sector are larger than those in the agricultural sector. Compared with developing regions, most developed regions have consistently larger per-capita consumption-based GHG emissions over the whole economy, as well as higher production-based emissions. In the manufacturing sector, differences calculated by subtracting production-based emissions from consumption-based GHG emissions are determined by the regional economic level while, in the agricultural sector, they are dependent on regional production structures that are determined by international trade competitiveness. In the manufacturing sector, these differences are consistently and increasingly positive for the U.S., EU15 and Japan but negative for developing regions. In the agricultural sector, the differences calculated for the major agricultural importers like Japan and the EU15 are consistently positive while those of exporters like the U.S., Australia and New Zealand are consistently negative. (C) 2012 Elsevier Ltd. All rights reserved.

The design of optimal climate policy with air pollution co-benefits (2012) 🗎🗎

This paper develops a model of an optimal regulatory program for greenhouse gases (GHGs) emissions that accommodates the benefits due to reductions of co-pollutants including: sulfur dioxide (SO2), nitrogen oxides (NOx), volatile organic compounds (VOC), and fine particulate matter (PM2.5). Employing per ton damage estimates for the co-pollutants produced by an integrated assessment model, co-pollutant damage estimates per ton carbon dioxide equivalent (CO(2)e) are developed for over 10,000 sources of GHGs in the lower 48 states including both transportation sources and electric power generation. For coal-fired electric power generation, the co-pollutant damages are larger in magnitude than recent peer-reviewed estimates of the marginal damage for GHGs. The co-pollutant damage per ton CO(2)e varies considerably across source types and source location. The paper estimates the welfare gain from adopting a policy that encompasses the spatially variant co-pollutant damage to be between $1 million and $85 million annually. The range depends on the slope of the marginal abatement cost curve. The paper also shows that a distortionary aggregate emission cap reduces the advantage of differentiated policy. Provided an excessively strict cap, the spatially differentiated policy may reduce aggregate welfare. This result has important implications for GHG policy in the United States: although co-pollutant benefits of abating GHGs have been shown to be significant in magnitude, tailoring climate policy to reflect these source-specific co-benefits is not necessarily socially beneficial. This bolsters arguments for upstream policy designs. (C) 2012 Elsevier BM. All rights reserved.

OPEC: Market failure or power failure? (2012) 🗎🗎

The actions of OPEC and Saudi Arabia are discussed in terms of their objectives and their technical and social constraints. It is concluded (1) that OPEC does not act as a cartel and (2) that Hotelling's rule is not an important feature of pricing or production. OPEC's (more specifically, Saudi Arabia's) ideal policy is to keep price moderate to try to assure a market for their high reserves over the long run. Such an action would require heavy investments in capacity, including in excess capacity, for times of interruption of supply from other countries as in the 1990s and for times of high demand as in the 2000s. The action may be inconsistent with other objectives and in any case may be too difficult to achieve. (C) 2012 Elsevier Ltd. All rights reserved.

Fulfilling the Kyoto protocol in Spain: A matter of economic crisis or environmental policies? (2012) 🗎🗎

In 2008, Spain exceeded by 20.9% the CO2 emissions allowed by the Kyoto Protocol for 2012. The financial and economic crisis has transformed these figures: as production fell so did energy demand and with it CO2 emissions. Will the Spanish economic crisis allow Spain to fulfill its commitments? With this in mind, we have developed an extended input-output model able to forecast energy demand and compute CO2 emissions linked to the consumption of energy goods: petroleum products, gas and coal. The results show that the crisis, and in particularly, the stagnation of the construction industry, is only one of the pillars which help to contain these emissions at -6.81%. The possibility of incorporating environmental policies, new technologies and increases in the price of crude oil in these simulations, means an even greater reduction of emissions than the impact of the crisis (-9.76%). The final result of our most pessimistic/realistic scenario is that, in 2012, Spain will exceed its CO2 emissions, linked to the combustion of energy goods, by only 0.9%. (C) 2012 Elsevier Ltd. All rights reserved.

Efficiency, productivity and environmental policy: A case study of power generation in the EU (2012) 🗎🗎

This study uses the EU public power generating sector as a case study to investigate the environmental efficiency and productivity enhancing performance of the European Union's CO2 Emissions Trading Scheme (EU ETS) in its first phase. Using Data Envelopment Analysis methods, we measure the environmental efficiency and the productivity growth registered in public power generation across the EU over the 1996-2007 period. In the second stage of our analysis we attempt to explain changes in productivity and efficiency over time using econometric techniques. Our analysis suggests two conclusions: carbon pricing led to an increase in environmental efficiency and to a shift outwards of the technological frontier; and, the overly generous allocation of emission permits had a negative impact on both measures. These results are shown to be robust to changes in controls and specifications. (C) 2011 Elsevier B.V. All rights reserved.

MUNICIPAL SOLID WASTE GENERATION AND ECONOMIC GROWTH ANALYSIS FOR THE YEARS 2000-2013 IN ROMANIA, BULGARIA, SLOVENIA AND GREECE (2012) 🗎🗎

This paper presents the results of the analysis of the relation between waste management and economic situation for the years 2000-2013 in Romania, Bulgaria, Slovenia and Greece. In particular, the interest of the present study focuses on the "decoupling principle" which falls within the EU policies. The population growth, the gross domestic product and the municipal solid waste generation constitute the basic indicators used. These indicators are integrated into one, the municipal waste intension (MWI) indicator, allowing for easy comparison between the countries and simplifying data analysis. In general terms, it can be stated that there is a decoupling of waste generation and economic growth in all countries as well as in EU-27 on average. Greece seems to follow the EU-27 average, Slovenia, Romania and Bulgaria show similar patterns with Bulgaria to show a sharper and larger decrease of the MWI indicator.

The importance of transnational corporations in the supply of oil to Europe: Implications (2012) 🗎🗎

This paper analyzes the positioning of European and American transnational oil companies in the supply of oil from outside Europe to European countries. The analysis focuses on the triangular relationship between: the control that these companies exercise over oil refining and the marketing of petroleum products in Europe; the international production of crude by these companies in oil regions; and the import of crude oil by European countries. Two indicators were developed to assess the relevance of these large corporations: (a) the extent of the supply to their European refineries via their own international production, and (b) the contribution of each company to the total crude oil imports received by six European countries. (C) 2012 Elsevier Ltd. All rights reserved.

Globalization, creative destruction, and labour share change: evidence on the determinants and mechanisms from longitudinal plant-level data (2012) 🗎🗎

The labour share of GDP has declined in recent decades in many leading economies. This paper examines the mechanisms of falling labour share using Finnish manufacturing plant-level data over three decades. Using a useful variant of the decomposition method, we make a distinction between the changes in the average plant and the micro-level restructuring. We show that micro-level restructuring is the link between the declining labour share and increasing productivity, and that increased international trade is a factor underlying those shifts.

"Investments and public finance in a green, low carbon, economy" (2012) 🗎🗎

The paper evaluates the impacts on investments and public finance of a transition to a green, low carbon, economy induced by carbon taxation. Four global tax scenarios are examined using the integrated assessment model WITCH. Taxes are levied on all greenhouse gases (GHGs) and lead to global GHG concentrations equal to 680, 560, 500 and 460 ppm CO2-eq in 2100. Investments in the power sector increase with respect to the Reference scenario only with the two highest taxes. Investments in energy-related R&D increase in all tax scenarios, but they are a small fraction of GDP. Investments in oil upstream decline in all scenarios. As a result, total investments decline with respect to the Reference scenario. Carbon tax revenues are high in absolute terms and as share of GDP. With high carbon taxes, tax revenues follow a "carbon Lifter" curve. The model assumes that tax revenues are flawlessly recycled lump-sum into the economy. In all scenarios, the power sector becomes a net recipient of subsidies to support the absorption of GHGs. In some regions, with high carbon taxes, subsidies to GHG removal are higher than tax revenues at the end of the century. 2012 Elsevier B.V. All rights reserved.

The relevance of process emissions for carbon leakage: A comparison of unilateral climate policy options with and without border carbon adjustment (2012) 🗎🗎

Climate policy arrangements of partial regional coverage, as they seem to emerge from the UNFCCC process, might lead to carbon leakage and hence a broad literature has developed to quantify leakage. Most of these analyses, however, are confined to consider emissions from fuel combustion only. Yet, some of the most relevant simultaneously energy intensive and internationally trade exposed sectors are also subject to substantial emissions from industrial processes. Carbon dioxide emissions can be released in industrial processes which physically or chemically transform materials. In the steel and cement sectors, for example, these process emissions amount to about half of sector carbon dioxide emissions in many countries. We incorporate industrial process emissions based on UNFCCC data into a multi-sectoral multi-regional computable general equilibrium model and analyze the implications of a unilateral EU 20% carbon dioxide emission reduction policy on leakage and the effectiveness of border carbon adjustment in reducing leakage. By comparing the results to a model without process emissions, we find that leakage of climate policy so far has been underestimated. Leakage turns out to be higher when process emissions are correctly accounted for (38% instead of 29% for combustion emissions only). Conversely, border carbon adjustment measures are found to be roughly twice as effective to reduce leakage rates, when process emissions are correctly accounted for as carbon adjustment rates are more directly targeted to the relevant sectors. Yet, border carbon adjustment measures should not be seen as a panacea as they might impede necessary technological carbon-free innovation, unless they are phased out over time. (C) 2012 Elsevier B.V. All rights reserved.

Energy and labour reform: Evidence from Iran (2012) 🗎🗎

Taking Iran as a case study, we analyze the effects of eliminating crude oil and fuel subsidies on the labour market using two alternative policy options. The first redistributes additional revenue as extra income to households, while the second directs revenue into increased investment. We investigate immediate versus gradual subsidy removal, focusing on the transition dynamics at play. A purpose-built dynamic Computable General Equilibrium model is deployed with a unique Social Accounting Matrix of Iran. It is shown that rebating the extra revenue to households would adversely affect the labour market. Industries and employment contract due to the Dutch Disease effect and the more expensive fuel inputs. Channeling extra revenue into investment, however, considerably improves the labour market's fortunes in the long run via increased capital accumulation and shifts in industrial composition. Gradual subsidy removal allows for a smoother transition that minimizes short-run costs in the labour market. (C) 2011 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

Europe's climate goals and the electricity sector (2012) 🗎🗎

EU's objective of attaining 20% reductions in greenhouse gas emissions by 2020 is analysed with a general equilibrium model detailing electricity generation technologies and capital vintaging. Consistent with theory and other analysts we find that the nonuniform treatment of emitting sectors in EU raises abatement costs - by a factor of two to three. Under cost effective emission reductions - a more comprehensive tradable cap electricity generation abates more than its proportional share in emissions. The European economy abates by substitution towards natural gas, by energy efficiency improvements, and by reductions in emission intensive manufactures. Applied policies such as renewable support - and responses such as carbon leakage - hold down the prices for emission and electricity, thus also holds down incentives for energy efficiency and technological change. This leads to little preparation for the future and global mitigation. (C) 2011 Elsevier Ltd. All rights reserved.

Distributional impacts of taxing carbon in China: Results from the CEEPA model (2012) 🗎🗎

This study aims to examine how mitigating CO2 through a carbon tax might affect the development goals of narrowing urban-rural gap and improving people's living standard. In this study, the China Energy and Environmental Policy Analysis (CEEPA) model, a recursive dynamic computable general equilibrium model, was employed to simulate taxing carbon in China. Different carbon tax schemes were designed and their impacts on household disposable income, household welfare, economic growth, and CO2 emissions were compared. Results show that, given the current social security system that obviously favors urban households and the current investment-driven economic growth pattern, without complementary measures for protecting households, a carbon tax will not only widen the urban-rural gap, but also reduce the living standards of both urban and rural households. The negative impacts caused by carbon tax will enlarge over time. An ideal solution, no matter under an emission intensity goal or a total amount control goal, is to reduce indirect tax with carbon tax revenue, whilst increase the share rural households obtain in government transfers. (C) 2011 Published by Elsevier Ltd.

Explaining the reductions in US corn ethanol processing costs: Testing competing hypotheses (2012) 🗎🗎

The processing costs of US corn ethanol have declined by 45% since 1983 as production volumes have increased seventeen-fold. We investigate the role of various factors that could explain this, including economies of scale, cumulative experience, induced innovation in response to rising input prices, an autonomous technological change, and trade induced competition from imported ethanol. Using data on dry-mill ethanol processing costs over the 1983-2005 period, we find evidence to show that US corn ethanol production exhibited decreasing returns to scale, that learning by doing played an important role in reducing these processing costs with a learning rate of 0.25, and that sugarcane ethanol imports contributed to making the corn ethanol industry more competitive. Other factors such as the rising prices of energy and labor did induce lower processing costs, but the effect is not statistically significant. The inclusion of these competing explanations for the reduction in processing costs of US corn ethanol lead to a significantly higher learning rate than otherwise, and this learning rate is found to be robust across specifications. (C) 2012 Elsevier Ltd. All rights reserved.

Estimating the impact of investing in a resource efficient, resilient global energy-intensive manufacturing industry (2012) 🗎🗎

To examine the prospects of creating a resource efficient, low-carbon economy, this paper focuses on the impacts of investing in energy, water and waste. The broader industrial sector, as well as six energy-intensive manufacturing industries is studied. A system dynamics model is developed for each selected sub-sector, which is embedded in a broader integrated framework to fully appreciate the linkages within the industries and across the economy, environment and society. This study further simulates and analyzes the key factors affecting the economic performance and environmental impacts of these industries in a resource efficient scenario compared to a business-as-usual (BAU) case. Our analysis indicates that with no additional resource-efficiency and conservation actions taken, these industries - highly exposed to rising fuel prices under BAU - will suffer from declined profitability over time. Under the alternative scenario however, an incremental investment in efficiency will not only substantially curb energy demand and emissions, but will also effectively reduce energy expenditures in all analyzed industries yielding an overall positive return on investment after nine years. Though the extent of cost saving varies across the sub-sectors due to the variation in energy mix, they will all see considerable reduction in unit production costs and increase in operating margins and profits in the medium to longer term. (C) 2011 Elsevier Inc. All rights reserved.

IS EMISSION TRADING BENEFICIAL? (2012) 🗎🗎

We develop a two-country (North and South), two-good, general equilibrium model of international trade in goods and explore the effects of domestic and international emission trading under free trade in goods. Whereas domestic emission trading in the North may result in carbon leakage by expanding the South's production of the emission-intensive good, international emission trading may induce the North to expand the production of the emission-intensive good by importing emission permits. Emission trading may deteriorate the global environment. The North's (South's) emission trading may not benefit the South (North). International emission trading improves global efficiency but may not benefit both countries.

The Promise and Problems of Pricing Carbon: Theory and Experience (2012) 🗎🗎

Because of the global commons nature of climate change, international cooperation among nations will likely be necessary for meaningful action at the global level. At the same time, it will inevitably be up to the actions of sovereign nations to put in place policies that bring about meaningful reductions in the emissions of greenhouse gases. Due to the ubiquity and diversity of emissions of greenhouse gases in most economies, as well as the variation in abatement costs among individual sources, conventional environmental policy approaches, such as uniform technology and performance standards, are unlikely to be sufficient to the task. Therefore, attention has increasingly turned to market-based instruments in the form of carbon-pricing mechanisms. We examine the opportunities and challenges associated with the major options for carbon pricing-carbon taxes, cap-and-trade, emission reduction credits, clean energy standards, and fossil fuel subsidy reductions-and provide a review of the experiences, drawn primarily from developed countries, in implementing these instruments. Our summary of relevant theory and survey of experience from industrialized nations may be helpful to those who wish to examine the potential applicability of carbon pricing in the context of developing countries.

Green Jobs and Renewable Electricity Policies: Employment Impacts of Ontario's Feed-in Tariff (2012) 🗎🗎

Policy makers justify renewable energy promotion policies partly on the grounds that such policies have positive employment impacts. We apply a computable general equilibrium model to assess the labour market impacts of the feed-in tariff policy used by the Government of Ontario. We find that although the policy is successful at increasing the employment in the 'green' sectors of the economy, the policy is also likely to increase the rate of unemployment in the province, and to reduce overall labour force participation. We conclude that policies designed to promote renewable energy should be promoted for the sake of their environmental impacts, not for their labour market effects.

Mexican unilateral trade liberalization in the middle of a global economic crisis (2012) 🗎🗎

Facing the global economic crisis, in October 2008 the Mexican government announced the oProgramme to Promote Growth and Employment' consisting of five steps. One of them resulted in an ambitious unilateral effort to reduce most-favoured nation tariffs. The unilateral liberalization decision emerged as a measure to encourage growth, at a time of global economic crisis. This policy is based on the wide margin of action that the government of Mexico has in improving its foreign trade regulation. This paper reviews the logic of the implementation of tariff dismantling by a developing economy such as Mexico. It analyses the Mexican trade liberalization phases and explains the negative impact on the Mexican economy's competitiveness of high import tariffs with non-preferential trade partners. Finally, this paper presents preliminary estimates of the impact that the phase-out of Mexican tariffs had on imports during its first year of implementation.

International coal trade and restrictions on coal consumption (2012) 🗎🗎

Coal consumption is a major source of CO2 emissions and other air pollutants and is therefore a focus of environmental policy. However, countries that restrict their coal consumption will likely expand their coal exports to foreign markets with fewer restrictions on consumption. The adjustment in international trade will mitigate the impact on coal industry employment but will also reverse some of the reduction in global emissions. This paper quantifies the impact of restrictions on coal consumption in the United States and several other large countries on global coal consumption, trade, and industry employment. The impact calculations are based on an econometric model of the international coal market. The parameters of the model are fitted to panel data on coal consumption and production in 53 countries. (C) 2011 Elsevier B.V. All rights reserved.

An evaluation of the welfare effects of reducing energy subsides in Iran (2012) 🗎🗎

Energy prices in Iran have traditionally been heavily subsidized by the Government, and as a result, energy consumption per capita in Iran is close to the European Union level. The welfare effects of efforts to raise energy prices closer to world levels are examined in this paper. Reform of energy prices is an important element of the "Economic Reform Plan" (2010-2014) for Iran. We first analyze the relationship between energy consumption, energy and non-energy prices by estimating the household expenditure function. The results show that a higher energy prices will decrease energy consumption by Iranian households. Second, we evaluate the impact of a rise of energy prices on the household welfare by measuring the compensating variation (CV) in five steps with a compensating payment. The results show that Iranian household welfare will increase with a 100% or 200% rise in energy prices, if the government pays 20%, 30% or 50% of the $20 billion income resulting from removing energy subsidies. While, in contrast, Iranian household welfare will decrease with a 400% and 500% rise in energy prices, if the government payment is 20% or 30% of $20 billion income. (C) 2012 Elsevier Ltd. All rights reserved.

Kyoto and the carbon footprint of nations (2012) 🗎🗎

The carbon footprint of a country refers to the flow of CO2 emissions caused by domestic absorption (i.e., consumption and investment) activities. Trade in goods drives a wedge between the footprint and domestic emissions. We provide a new panel database on carbon footprints and carbon net trade. Using a first-differenced IV estimation strategy, we evaluate the effects of ratification of binding Kyoto commitments on the carbon footprint and emissions. Instrumenting countries' Kyoto commitment by their participation in the International Criminal Court, we show that Kyoto commitment has reduced domestic emissions in committed countries by about 7%, has not lowered carbon footprints, but has increased the share of imported over domestic emissions by about 14 percentage points. It follows that the Kyoto Protocol has had at best no effect on world-wide emissions. The results highlight the difficulties of unilateral climate policies. (C) 2011 Elsevier Inc. All rights reserved.

How large are the impacts of carbon-motivated border tax adjustments on China and how to mitigate them? (2013) 🗎🗎

There have been growing clamours for carbon-motivated border tax adjustments (CBTAs) targeted at countries that do not accept the carbon emission reduction targets. Currently, China is the largest carbon emitter with large annual incremental carbon emissions and might have to face the challenge of CBTA. Therefore, it is a pressing policy challenge for the government to get prepared for mitigating the negative impacts of CBTAs on China. In this article, we compare the impacts of CBTAs across large developing economies and compare the performances of different policy options to mitigate the negative impacts. The main findings are as follows. First, CBTA would affect different economies and different sectors differently. CBTA would result in a shift of production across sectors and relocation of output from the target countries to CBTA users. Second, CBTA would contribute to world's emissions reduction, but less than expected due to carbon leakage. Finally, policy options, which could reduce the present distorting effects, would be preferred to other policy options that would add additional distorting effects to the economy. Looking ahead, the Chinese government should get prepared for mitigating the negative impacts of CBTAs because its economy could be adversely affected. (C) 2013 Elsevier Ltd. All rights reserved.

Environmental externalities and regulation constrained cost productivity growth in the US electric utility industry (2013) 🗎🗎

This paper examines whether having to comply with Phase 1 of Title IV of the 1990 Clean Air Act, and rate of return regulation, each impacted the rate of total factor productivity (TFP) growth when accounting for the production of good and bad outputs. Phase 1, effective from 1995 to 1999, requires electric utilities to reduce their emissions of sulfur dioxide and nitrogen oxide (bad outputs). Actions undertaken to reduce the emissions (using less sulfur content coal, installing equipment), may have led to higher production costs, and impacted the rate of TFP growth. Rate regulation may impact how the firm produces its selected output level, which could lead to higher cost over time, and biased estimates of TFP growth. Following the work of Ball et al. (Struct Change Econ Dyn 16(3): 374-394, 2005), who developed the standard Malmquist cost productivity (MCP) index, we develop a MCP index for a rate regulated firm (RMCP index) then use the standard and regulated indices to determine whether having to comply with Phase 1 impacted TFP growth. Empirical results indicate that (i) the RMCP index underestimated the rate at which TFP growth occurred, (ii) Phase 1 utilities on average experienced positive TFP growth from 1996 to 2000 (Phase 1 firms experienced higher TFP growth rates than the rates experienced by firms not subject to Phase 1), and operated more allocatively inefficient in complying with the Phase 1 restrictions. Complying with Phase 1 did not affect the rate at which technical change occurred or the rates of change in scale efficiency.

Vision 2023: Forecasting Turkey's natural gas demand between 2013 and 2030 (2013) 🗎🗎

Natural gas is the primary source for electricity production in Turkey. However, Turkey does not have indigenous resources and imports more than 98.0% of the natural gas it consumes. In 2011, more than 20.0% of Turkey's annual trade deficit was due to imported natural gas, estimated at US$ 20.0 billion. Turkish government has very ambitious targets for the country's energy sector in the next decade according to the Vision 2023 agenda. Previously, we have estimated that Turkey's annual electricity demand would be 530,000 GWh at the year 2023. Considering current energy market dynamics it is almost evident that a substantial amount of this demand would be supplied from natural gas. However, meticulous analysis of the Vision 2023 goals clearly showed that the information about the natural gas sector is scarce. Most importantly there is no demand forecast for natural gas in the Vision 2023 agenda. Therefore, in this study the aim was to generate accurate forecasts for Turkey's natural gas demand between 2013 and 2030. For this purpose, two semi-empirical models based on econometrics, gross domestic product (GDP) at purchasing power parity (PPP) per capita, and demographics, population change, were developed. The logistic equation, which can be used for long term natural gas demand forecasting, and the linear equation, which can be used for medium term demand forecasting, fitted to the timeline series almost seamlessly. In addition, these two models provided reasonable fits according to the mean absolute percentage error, MAPE %, criteria. Turkey's natural gas demand at the year 2030 was calculated as 76.8 billion m(3) using the linear model and 83.8 billion m(3) based on the logistic model. Consequently, found to be in better agreement with the official Turkish petroleum pipeline corporation (BOTAS) forecast, 76.4 billion m(3), than results published in the literature. (C) 2013 Elsevier Ltd. All rights reserved.

Policy options to improve the effectiveness of the EU emissions trading system: A multi-criteria analysis (2013) 🗎🗎

This paper considers several policy options which have been proposed to improve the functioning of the ETS. These options require an intervention either on the ETS cap (-30% target, set-aside, carbon central bank, long-term target) or on the carbon price (European and national price floor). We analyse the impact of each policy on the ETS carbon price and emissions. A multi-criteria evaluation method is applied to compare the policy options against a plurality of environmental, economic and procedural criteria. We find that the final ranking depends on the goals to be achieved, i.e., the relative weights attributed to the criteria. When policymakers want mainly to support the carbon price both in the short and long-run, while improving ETS flexibility and harmonization, the CCB and the EU price floor are, respectively ranked as first and second-best options. As the preference for environmental and implementation goals gradually increases, the position of the EU price floor and CCB options tend to invert. The -30% target should be adopted when reducing emissions is the priority goal, while a national price floor is the worst option, in this case. Nevertheless, self-interested States looking for a relatively quick, feasible solution, may find it optimal. (C) 2013 Elsevier Ltd. All rights reserved.

Economic implications of reducing carbon emissions from energy use and industrial processes in Brazil (2013) 🗎🗎

This study assesses the economy-wide impacts of cutting CO2 emissions on the Brazilian economy. It finds that in 2040, the business-as-usual CO2 emissions from energy use and industrial processes would be almost three times as high as those in 2010 and would account for more than half of total national CO2 emissions. The current policy aims to reduce deforestation by 70 percent by 2017 and lower emissions intensity of the overall economy by 36-39 percent by 2020. If the policy were implemented as planned and continued to 2040, there would be no need to cut CO2 emissions from energy use and industrial processes until 2035, as emissions reduction through controlling deforestation would be enough to meet the voluntary carbon mitigation target of Brazil. The study also finds that using the carbon tax revenue to subsidize wind power can effectively increase the country's wind power output if that is the policy priority. Further, it finds evidence supporting the double dividend hypothesis, i.e., using revenue from a hypothetical carbon tax to finance a cut in labor income tax can significantly lower the GDP impacts of the carbon tax. (C) 2013 Elsevier Ltd. All rights reserved.

Policy Interactions and Underperforming Emission Trading Markets in China (2013) 🗎🗎

Emission trading is considered to be costeffective environmental economic instrument for pollution control. However, the ex post analysis of emission trading program found that cost savings have been smaller and the trades fewer than might have been expected at the outset of the program. Besides policy design issues, pre-existing environmental regulations were considered to have a significant impact on the performance of the emission trading market in China. Taking the Jiangsu sulfur dioxide (SO2) market as a case study, this research examined the impact of policy interactions on the performance of the emission trading market. The results showed that cost savings associated with the Jiangsu SO2 emission trading market in the absence of any policy interactions were CNY 549 million or 12.5% of total pollution control costs. However, policy interactions generally had significant impacts on the emission trading system; the lone exception was current pollution levy system. When the model accounted for all four kinds of policy interactions, the total pollution control cost savings from the emission trading market fell to CNY 39.7 million or 1.36% of total pollution control costs. The impact of policy interactions would reduce 92.8% of cost savings brought by emission trading program.

Delving into Liberia's energy economy: Technical change, inter-factor and inter-fuel substitution (2013) 🗎🗎

The industrial energy mix of Liberia is dominated by petroleum products. This has generated serious environmental problems, contributing immensely to CO2 emissions and other pollutants in the country. This study has attempted to investigate the potential for inter-factor and inter-fuel substitution between capital, labor, petroleum and electricity in Liberia by employing a translog production and cost function approach. Ridge regression procedure has been adopted to estimate the parameters of the function due to multicollinearity in the data. Estimation results show that all inputs are substitutes. These suggest that price-based policies, coupled with capital subsidy programs can be adopted to redirect technology use towards cleaner energy sources like electricity; hence, retaining the ability to fuel the economy, while also mitigating greenhouse gas (GHG) emissions. Substitution between energy and labor and energy and capital implies that removal of price ceilings on energy in Liberia would tend to reduce energy use and increase capital and labor intensiveness. Notwithstanding, the study seems to show no evidence of convergence in relative technological progress of the four inputs implying that petroleum will continue to play a dominant role in the energy consumption mix of Liberian industry while labor investment will continue to outweigh capital inputs. Finally, the findings of this study provide general insights and underscore the importance of policies that focus on installed capacity of renewable electricity, energy intensity targets as well as merger of enterprises. (C) 2013 Elsevier Ltd. All rights reserved.

Economic impact assessment of Turkey's post-Kyoto vision on emission trading (2013) 🗎🗎

For the post-Kyoto period, Turkey strongly emphasizes the establishment of national emission trading system by 2015 and its integration with the EU ETS along its accession process to the EU. In this paper, we study the mechanisms of adjustment and economic welfare consequences of various ETS regimes that Turkey considers to apply by 2020, i.e. regional ETS and international trading within the EU ETS. We conduct our analysis under the current EU 20-20-20 emission target, 20%, and also under its revised version, 30%. We find that Turkey has economic gains from linking with the EU ETS under the 20% cap, in comparison to the domestic ETSs. Despite the EU's welfare loss under linkage in comparison to the case where Turkey has domestic abatement efforts, it still prefers linking as it increases economic well being compared to the case where Turkey does not abate. Under 30% cutback, Turkey has critical output loss under linkage due to high abatement burden on the EU, while the EU is better off as it passes some of its abatement burden to Turkey. Therefore, emission quotas and their allocation across the ETS and non ETS sectors become highly critical in distributing the overall economic gains from bilateral trading. (C) 2013 Elsevier Ltd. All rights reserved.

An overview of CO2 cost pass-through to electricity prices in Europe (2013) 🗎🗎

This paper investigates the link between wholesale electricity prices in Europe and the CO2 cost, i.e. the price of European Union Allowances (EUAs), over the two first phases of the European Union Emissions Trading Scheme (EU ETS). We set up a theoretical framework and an empirical model to estimate to what extent daily fluctuations of CO2 costs may have impacted electricity prices. Regarding estimation results for the first phase of the EU ETS, about 42% of estimated pass-through rates appear to be statistically significant, while only one third of them are statistically different from zero in the second phase. We try to improve those results by proposing alternative estimates based on the EU ETS compliance periods. (C) 2013 Elsevier Ltd. All rights reserved.

Carbon tax scenarios and their effects on the Irish energy sector (2013) 🗎🗎

In this paper we use annual time series data from 1960 to 2008 to estimate the long run price and income elasticities underlying energy demand in Ireland. The Irish economy is divided into five sectors: residential, industrial, commercial, agricultural and transport, and separate energy demand equations are estimated for all sectors. Energy demand is broken down by fuel type, and price and income elasticities are estimated for the primary fuels in the Irish fuel mix. Using the estimated price and income elasticities we forecast Irish sectoral energy demand out to 2025. The share of electricity in the Irish fuel mix is predicted to grow over time, as the share of carbon intensive fuels such as coal, oil and peat, falls. The share of electricity in total energy demand grows most in the industrial and commercial sectors, while oil remains an important fuel in the residential and transport sectors. Having estimated the baseline forecasts, two different carbon tax scenarios are imposed and the impact of these scenarios on energy demand, carbon dioxide emissions, and government revenue is assessed. If it is assumed that the level of the carbon tax will track the futures price of carbon under the EU-ETS, the carbon tax will rise from (sic)21.50 per tonne CO2 in 2012 (the first year forecasted) to (sic)41 in 2025. Results show that under this scenario total emissions would be reduced by approximately 861,000 tonnes of CO2 in 2025 relative to a zero carbon tax scenario, and that such a tax would generate (sic)1.1 billion in revenue in the same year. We also examine a high tax scenario under which emissions reductions and revenue generated will be greater. Finally, in order to assess the macroeconomic effects of a carbon tax, the carbon tax scenarios were run in HERMES, the ESRI's medium-term macroeconomic model. The results from HERMES show that, a carbon tax of (sic)41 per tonne CO2 would lead to a 0.21% contraction in GDP, and a 0.08% reduction in employment A higher carbon tax would lead to greater contractions in output. (c) 2013 Elsevier Ltd. All rights reserved.

Proposal for a national inventory adjustment for trade in the presence of border carbon adjustment: Assessing carbon tax policy in Japan (2013) 🗎🗎

In this paper we pointed out a hidden inequality in accounting for trade-related emissions in the presence of border carbon adjustment. Under a domestic carbon pricing policy, producers pay for the carbon costs in exchange for the right to emit. Under border carbon adjustment, however, the exporting country pays for the carbon costs of their exports to the importing country but not be given any emission credits. As a result, export-related emissions will be remained in the national inventory of the exporting country based on the UNFCCC inventory approach. This hidden inequality is important to climate policy but has not yet been pointed out. To address this issue we propose a method of National Inventory Adjustment for Trade, by which export-related emissions will be deducted from the national inventory of the exporting country and added to the national inventory of the importing country which implements border carbon adjustment. To assess the policy impacts, we simulated a carbon tax policy with border tax adjustment for Japan using a multi-region computable general equilibrium model. The results indicate that with the National Inventory Adjustment for Trade, both Japan's national inventory and the carbon leakage effects of Japan's climate policy will be greatly different. (C) 2013 Elsevier Ltd. All rights reserved.

ENVIRONMENTAL TAX REFORM SCENARIOS ANALYSIS (2013) 🗎🗎

The triad - economics - environment - energy (E3) has become one of the most dynamically developing areas even at the EU level. The following article proposes the evaluation of the environmental tax reform (ETR) as an economic tool for all of the E3 sectors. ETR is an important tool in reducing greenhouse gas emissions and, simultaneously, it can positively impact the economic growth and employment rate. Three fundamental studies and their differing ETR scenarios have been selected and examined taking into consideration various oil-prices, carbon-prices, greenhouse gas emission targets, revenue recycling methods and scales of ETR. This article deals with the possible ETR impacts on CO2 emissions, the GDP and the employment situation in the Czech Republic and substantiates the conclusions of some selected scenarios as well as outlines some prerequisites for the ETR implementation in the Czech Republic. The reference groups were put together to check the impact on selected EU countries and thus confirm or disprove the resulting conditions with a positive impact at the macro-economic level. The results depend on a combination of the following factors; the domestic market energy price, the economy's energy demand, and the proportion of fossil fuels in the energy mix. Based on these findings, the Czech Republic has, assuming the commitments from the Europe 2020 Strategy are adhered to, good prerequisites for the ETR implementation. Some positive effects would be more visible should the Czech environmental tax reform not be accepted in such a narrow sense. Foreign studies indicate that as long as a part of the revenues is designed for eco-innovations and the support of clean technology branches, an additional advantage should result in the form of employment growth, as well as GDP growth.

Frameworks for pricing greenhouse gas emissions and the policy objectives they promote (2013) 🗎🗎

Four cost-effective frameworks for pricing greenhouse gas emissions currently receive widespread attention: cap-and-trade, emission fees, and hybrid cap-and-trade approaches that include upper or lower limits on permit prices (price ceilings or floors). This paper develops a fifth framework that uses an emission fee with an upper limit on the quantity of emissions a quantity ceiling and compares the impact of each framework on emission prices and quantities. Cap-and-trade with a price ceiling minimizes price increases for emitting activities in all cases whereas an emission fee with a quantity ceiling maximizes emissions reductions. Thus, the choice of framework influences policy outcomes because each framework is more or less suited to particular policy goals. Whether pursuing one potential policy goal serves society's interests best depends on the eventual consequences of climate damage and emissions pricing, which are uncertain when policy choices are made. Policy updating over time may reduce but likely cannot entirely eliminate the differences in outcome that arise due to framework choice. Therefore, the "best" framework for emissions pricing depends on subjective preferences regarding the relative importance of different policy objectives, most notably whether one is more risk averse to climate damages or emissions price increases. (C) 2013 Elsevier Ltd. All rights reserved.

Long-term fuel demand: Not only a matter of fuel price (2013) 🗎🗎

This paper analyzes the non-energy determinants of transport-related fuel consumption and in particular investigates the role of housing price trajectories in driving long-run demand for motor fuel. To this aim it develops a dynamic modeling framework and takes the next step of testing it for cointegration. French data spanning fifty years up to 2009 are employed. It is found that when facing an increase of dwellings' real price, fuel demand remains stable in the short term whereas it increases significantly in the long term. Our results reflect the role of spatial organization in the formation of energy demand through the trade-off between housing prices and commuting costs. The modeling framework is then extended to assess the potential interest of combining housing policies aiming to drive down housing prices with carbon taxes so as to achieve a wide range of fuel demand reduction targets. It is shown that the relative contribution of housing policies increases with the degree of ambition of fuel consumption reduction targets. (C) 2013 Elsevier Ltd. All rights reserved.

The carbon curse: Are fuel rich countries doomed to high CO2 intensities? (2013) 🗎🗎

The carbon curse is a new theory, related to but distinct from the resource curse. It states that fossil-fuel rich countries tend to follow more carbon-intensive developmental pathways than [if they were] fossil-fuel poor countries, due to a hitherto unappreciated syndrome of causal mechanisms. First, fuel rich countries emit significant amounts of CO2 in the extraction of fuel and through associated wasteful practices such as gas flaring. Second, easy access to domestic fuel in such countries leads to crowding-out effects for their energy mix and economic structure (for example, abundant oil may displace other fuels from the energy mix and lead to the "Dutch Disease"). Third, fuel abundance weakens the economic incentive to invest in energy efficiency. Fourth, governments in fuel rich countries are under considerable pressure to grant uneconomic fuel consumption subsidies, which further augments the carbon intensity of their economic output. Due to the combined effect of these causal mechanisms, it is genuinely difficult for fuel rich countries to evade carbon-intensive developmental pathways. And yet there are remarkable exceptions like Norway. Such positive outliers indicate that the carbon curse is not destiny when appropriate policies are adopted. (C) 2013 Elsevier Ltd. All rights reserved.

CO2 emissions and economic activity: Short- and long-run economic determinants of scale, energy intensity and carbon intensity (2013) 🗎🗎

We analyze the short-term and the long-term determinants of energy intensity, carbon intensity and scale effects for eight developed economies and two emerging economies from 1973 to 2007. Our results show that there is a difference between the short-term and the long-term results and that climate policy are more likely to affect emission over the long-term than over the short-term. Climate policies should therefore be aimed at a time horizon of at least 8 years and year-on-year changes in emissions contains little information about the trend path of emissions. In the long-run capital accumulation is the main driver of emissions. Productivity growth reduces the energy intensity while the real oil price reduces both the energy intensity and the carbon intensity. The real oil price effect suggests that a global carbon tax is an important policy tool to reduce emissions, but our results also suggest that a carbon tax is likely to be insufficient decouple emission from economic growth. Such a decoupling is likely to require a structural transformation of the economy. The key policy challenge is thus to build new economic structures where investments in green technologies are more profitable. (C) 2013 Elsevier Ltd. All rights reserved.

Firm competitiveness and the European Union emissions trading scheme (2013) 🗎🗎

The European Union Emissions Trading Scheme is the first international cap-and-trade program for CO2 and the largest carbon pricing regime in the world. A principle concern over the Emissions Trading Scheme is the potential impact on the competitiveness of industry. Using a panel of 5873 firms in 10 European countries during 2001-2009, this paper seeks to assess the impact of the carbon regulation on three variables through which the effects on firm competitiveness may manifest unit material costs, employment and revenue. Our analysis focuses on three most polluting industries covered under the program-power, cement, and iron and steel. Empirical results indicate that the emissions trading program had different impacts across these three sectors. While no impacts are found on any of the three variables in cement and iron and steel industries, our analysis suggests a positive effect on both material costs and revenue in the power sector: the effect on material costs likely reflects the costs to comply with emissions constraints or other parallel renewable incentive programs while that on revenue may partly due to cost pass-through to consumers in a market less exposed to competition outside EU. Overall our findings do not substantiate concerns over carbon leakage, job loss and industry competitiveness at least during the study period. (C) 2013 Elsevier Ltd. All rights reserved.

The effects of alternative carbon mitigation policies on Japanese industries (2013) 🗎🗎

To address the climate change issue, developed nations have considered introducing carbon pricing mechanisms in the form of a carbon tax or an emissions trading scheme (ETS). Despite the small number of programmes actually in operation, these mechanisms remain under active discussion in a number of countries, including Japan. Using an input-output model of the Japanese economy, this article analyses the effects of carbon pricing on Japan's industrial sector. We also examine the impact of a rebate programme of the type proposed for energy-intensive trade-exposed (EITE) industries in U.S. legislation, the Waxman-Markey Bill (H.R. 2454), and in the European Union's ETS. We find that a carbon pricing scheme would impose a disproportionate burden on a limited number of sectors - namely, pig iron, crude steel (converters), cement and other EITE industries. Out of 401 industries, 23 would be eligible for rebates according to the Waxman-Markey-type programme, whereas 122 industries would be eligible for rebates according to the E.U.-type programme, if adopted in Japan. Overall, despite the differences in coverage, we find that the Waxman-Markey and E.U. rebate programmes have roughly similar impacts in reducing the average burden on EITE industries. (C) 2013 Elsevier Ltd. All rights reserved.

"Green" fuel tax on private transportation services and subsidies to electric energy. A model-based assessment for the main European countries (2013) 🗎🗎

This paper evaluates the environmental and macroeconomic implications for France, Germany, Italy and Spain of taxing motor vehicle fuels for private transportation, a sector not subject to the Emissions Trading System, so as to reduce taxes on electricity consumption and increase subsidies to renewable sources of electricity generation. The assessment is based on a dynamic general equilibrium model calibrated for each of the four countries. The results suggest that the measures posited will reduce carbon dioxide emissions in the transportation sector and favor the development of electricity generation from renewable sources, thus limiting the growth of emissions from electricity generation. The measures do not jeopardize economic activity. The results are robust whether implementation is unilateral in one country or simultaneous throughout the EU. (C) 2013 Elsevier B.V. All rights reserved.

A system dynamics model for analyzing energy consumption and CO2 emission in Iranian cement industry under various production and export scenarios (2013) 🗎🗎

Cement industry is one of the six energy intensive industries in Iran accounting for 15% of total energy consumption in the industrial sector. The sudden reform of energy prices in Iran is expected to have a great impact on production and energy consumption in this industry. In this paper, we present a system dynamics model to analyze energy consumption and CO2 emission in Iranian cement industry under various production and export scenarios. We consider new energy prices to estimate possible energy demand by this industry over next 20 years. The model includes demand for cement, production, energy consumption and CO2 emission in an integrated framework with emphasis on direct natural gas consumption. Producing blended cement, production using waste materials as alternative fuel, and wasted heat recovery for electricity generation in cement industry are three main corrective policies simulated and discussed herein. Simulation result show that complete removal of energy subsidy and implementation of corrective policies in the cement industry could potentially lead to reductions of 29% and 21%, respectively in natural gas and electricity consumptions and 22% reduction in CO2 emission. (C) 2013 Elsevier Ltd. All rights reserved.

Modelling energy and labour linkages: A CGE approach with an application to Iran (2013) 🗎🗎

We develop a unique dynamic CGE model suitable for analysing the policy interrelationships between fuels, crude oil and the labour market. Special emphasis is placed on the modelling of energies, crude oil, and the factors of production in the economy. To fully outline the model's features, we build simulations that hypothesize removing fuel and crude oil subsidies in an oil exporting economy to assess their effects on the labour market. The model allows for extensive treatment of transition dynamics, featuring gradual as well as immediate removal of the subsidies. We focus on constructing two alternative simulations applied to a purpose built Social Accounting Matrix (SAM) of the Iranian economy, with the revenue from subsidy elimination redistributed to households as extra income or into increased investment. The study pays particular attention to SAM data construction of energy goods and factors of production. In the specific case of Iran, the model shows that rebating the revenue from subsidy removals to households affects the labour market adversely, while channelling revenue into investment improves labour fortunes in the long run. The model is sufficiently detailed and encompassing to allow for further applications to other countries and energy-labour policy issues. (C) 2013 Elsevier B.V. All rights reserved.

Stacking low carbon policies on the renewable fuels standard: Economic and greenhouse gas implications (2013) 🗎🗎

This paper examines the economic and GHG implications of stacking a low carbon fuel standard (LCFS) with and without a carbon price policy on the Renewable Fuel Standard (RFS). We compare the performance of various policy combinations for food and fuel prices, fuel mix and fuel consumption. We also analyze the economic costs and benefits of alternative policy combinations and their distributional effects for consumers and producers in the transportation and agricultural sector in the US. Using a dynamic, multi-market, partial equilibrium model of the transportation and agricultural sectors, we find that combining the RFS with an LCFS policy leads to a reduction in first generation biofuels and an increase in second generation biofuels compared to the RFS alone. This policy combination also achieves greater reduction in GHG emissions even after considering offsetting market mediated effects. Imposition of a carbon price with the RFS and LCFS policy primarily induces fuel conservation and achieves larger GHG emissions reduction compared to the other policy scenarios. All these policy combinations lead to higher net economic benefits for the transportation and agricultural sectors relative to the no policy baseline because they improve the terms of trade for US. (C) 2012 Elsevier Ltd. All rights reserved.

Dynamic simulation of government subsidy policy effects on solar water heaters installation in Taiwan (2013) 🗎🗎

Because of the increasing shortage of international energy sources and greater climate change related to global warming, developing renewable energy sources has been emphasized by numerous countries. Solar energy provides a type of clean and non-polluting renewable energy source and contributes greatly to relieving the energy and environment crises. In response to the international increase in energy prices, and under environmental pressure to reduce global emissions of greenhouse gasses, promoting solar water heaters (SWHs) has become a crucial aspect of the Taiwanese government's energy saving policies. This study used system dynamics to explore the causal relationship of solar water heater installation in Taiwan and simulated relevant government policies. The results showed that if the government in Taiwan continues to subsidize SWH installation with NT$2250/m(2), SWH installation areas will reach the promoted target of 1,40,000 m(2) by 2020. (C) 2012 Elsevier Ltd. All rights reserved.

Reducing fuel subsidies and the implication on fiscal balance and poverty in Indonesia: A simulation analysis (2013) 🗎🗎

There is an urgent need for phasing out fuel subsidies in Indonesia due to a severe budget deficit and a worsening of income distribution. Fuel subsidies, of which almost 72% are enjoyed by the 30% of the richest income groups, have consumed on average 63.8% of the total subsidies between 1998 and 2013. This paper aims at evaluating the relationship between existing fuel subsidies and fiscal balance and at analysing the poverty impact of phasing out fuel subsidies. Applying a CGE-microsimulation, this study found that removing 25% of fuel subsidies increases the incidence of poverty by 0.259 percentage points. If this money were fully allocated to government spending, the poverty incidence would decrease by 0.27 percentage points. Moreover, the 100% removal of fuel subsidies and the reallocation of 50% of them to government spending, transfers and other subsidies could decrease the incidence of poverty by 0.277 percentage points. However, these reallocation policies might not be effective in compensating for the adverse impacts of the 100% removal of fuel subsidies if economic agents try to seek profit through mark-up pricing over the increase of production costs. (c) 2013 Elsevier Ltd. All rights reserved.

The effect of using consumption taxes on foods to promote climate friendly diets - The case of Denmark (2013) 🗎🗎

Agriculture is responsible for 17-35% of global anthropogenic greenhouse gas emissions with livestock production contributing by approximately 18-22% of global emissions. Due to high monitoring costs and low technical potential for emission reductions, a tax on consumption may be a more efficient policy instrument to decrease emissions from agriculture than a tax based directly on emissions from production. In this study, we look at the effect of internalising the social costs of greenhouse gas emissions through a tax based on CO2 equivalents for 23 different foods. Furthermore, we compare the loss in consumer surplus and the changed dietary composition for different taxation scenarios. In the most efficient scenario, we find a decrease in the carbon footprint from foods for an average household of 2.3-8.8% at a cost of 0.15-1.73 DKK per kg CO2 equivalent whereas the most effective scenario led to a decrease in the carbon footprint of 10.4-19.4%, but at a cost of 3.53-6.90 DKK per kg CO2 equivalent. The derived consequences for health show that scenarios where consumers are not compensated for the increase in taxation level lead to a decrease in the total daily amount of kJ consumed, whereas scenarios where the consumers are compensated lead to an increase. Most scenarios lead to a decrease in the consumption of saturated fat. Compensated scenarios leads to an increase in the consumption of added sugar, whereas uncompensated scenarios lead to almost no change or a decrease. Generally, the results show a low cost potential for using consumption taxes to promote climate friendly diets. (C) 2013 Elsevier Ltd. All rights reserved.

Trade and Climate Policies: Do Emissions from International Transport Matter? (2013) 🗎🗎

This paper provides orders of magnitude of the importance of CO2 emissions from international freight transport activities under a variety of scenarios regarding trade and climate policies. It is based on a stylised multiregion, multisector CGE model that includes the four modes of international transport (air, water, road and rail) and where choices regarding the energy mix and transport modes have been endogeneised. A separate decomposition of emission changes into the well-known scale, composition and technique effects is provided. Scale effects turn out to be roughly double in international transport than in exports, while technique effects are weaker due to less substitutability between energy inputs. As a result, international transport represents half of the world increase in global emissions when trade liberalisation is considered in isolation. When trade liberalisation is coupled with a carbon tax limited to rich countries, the change in international transport emissions represents roughly one-eighth of the carbon leakage effect.

Factor-Augmenting Technical Change: An Empirical Assessment (2013) 🗎🗎

This paper estimates factor-specific technical change and input substitution using a structural approach. It contributes to the existing literature by introducing various technology drivers for factor productivities and by assessing the impact of endogenous technical change on the elasticity of substitution. The empirical results suggest that factor productivities are indeed endogenous. In addition, technology drivers are factor-specific. Whereas the R&D stock and machinery imports are important determinants of energy and capital productivity, the education stock is statistically related to labour productivity. The rate of energy-augmenting technical change is larger than that of either labour or capital. By contrast, the productivity of these two factors grows at similar rates. Estimates of the elasticity of substitution are within the range identified by previous literature. In addition, we show that endogenous technical change reduces substitution. Because the elasticity of substitution is lower than one, knowledge and human capital can ultimately have an energy-using effect. The estimated structure of endogenous technical change suggests that Integrated Assessment models focusing on energy-saving technical change might underestimate climate policy costs.

Climate policy and dependence on traded carbon (2013) 🗎🗎

A growing number of countries regulate carbon dioxide (CO2) emissions occurring within their borders, but due to rapid growth in international trade, the products consumed in many of the same countries increasingly rely on coal, oil and gas extracted and burned in other countries where CO2 is not regulated. As a consequence, existing national and regional climate policies may be growing less effective every year. Furthermore, countries that are dependent on imported products or fossil fuels are more exposed to energy and climate policies in other countries. We show that the combined international trade in carbon (as fossil fuels and also embodied in products) increased from 12.3 GtCO(2) (55% of global emissions) in 1997 to 17.6 GtCO(2) (60%) in 2007 (growing at 3.7% yr(-1)). Within this, trade in fossil fuels was larger (10.8 GtCO(2) in 2007) than trade in embodied carbon (6.9 GtCO(2)), but the latter grew faster (4.6% yr(-1) compared with 3.1% yr(-1) for fuels). Most major economies demonstrate increased dependence on traded carbon, either as exports or as imports. Because energy is increasingly embodied in internationally traded products, both as fossil fuels and as products, energy and climate policies in other countries may weaken domestic climate policy via carbon leakage and mask energy security issues.

The Distributional Impact of Developed Countries' Climate Change Policies on Senegal: A Macro-Micro CGE Application (2013) 🗎🗎

In this paper, we present a distributional impact analysis of climate change policies envisaged or implemented to reduce greenhouse gas emissions in Senegal. We consider policies implemented in developed countries and their impact on a developing country. Moreover, we simulate the diminishing productivity of agricultural land as a potential result of climate change (CC) for Senegal. This country is exposed to the direct consequences of CC and is vulnerable to changes in world prices of energy, given its lack of substitution capacity. Past researches have shown that countries with this profile will bear the greatest burden of CC and its mitigation policies. Our results reveal slight increases in poverty when the world price of fossil fuels increases and the negative impact is further amplified with decreases in land productivity. However, subsidizing electricity consumption to protect consumers from world price increases in fossil fuels is shown to provide a weak cushion to poverty increase.

What is the potential impact of a taxation system reform on carbon abatement and industrial growth in China? (2013) 🗎🗎

Economists have long argued that market-based environmental policy such as an environmental tax is beneficial to abate pollution emissions. This study aims at investigating the impact of carbon tax levy on carbon dioxide (CO2) abatement and industrial growth in China. To this end, the marginal abatement cost (MAC) of industrial CO2 emissions is estimated as the benchmark of setting the carbon tax rate by using the directional distance function (DDF). This paper employs the polynomial dynamic panel model to forecast the impact of carbon tax levy on target variables such as sectoral value-added and CO2 intensity. The results reveal that the levy of a CO2 tax has a negative impact on industrial output only in the short term. In the long term, the impact of CO2 tax levy on output will become positive. The levy of a CO2 tax is always beneficial to reduce CO2 intensity. Corresponding policy suggestions for an environmental taxation system reform are given in the concluding section. (c) 2013 Elsevier B.V. All rights reserved.

The Transitional Costs of Sectoral Reallocation: Evidence From the Clean Air Act and the Workforce (2013) 🗎🗎

This article uses linked worker-firm data in the United States to estimate the transitional costs associated with reallocating workers from newly regulated industries to other sectors of the economy in the context of new environmental regulations. The focus on workers rather than industries as the unit of analysis allows me to examine previously unobserved economic outcomes such as nonemployment and long-run earnings losses from job transitions, both of which are critical to understanding the reallocative costs associated with these policies. Using plant-level panel variation induced by the 1990 Clean Air Act Amendments (CAAA), I find that the reallocative costs of environmental policy are significant. Workers in newly regulated plants experienced, in aggregate, more than $5.4 billion in forgone earnings for the years after the change in policy. Most of these costs are driven by nonemployment and lower earnings in future employment, highlighting the importance of longitudinal data for characterizing the costs and consequences of labor market adjustment. Relative to the estimated benefits of the 1990 CAAA, these one-time transitional costs are small.

On the efficiency of the European carbon market: New evidence from Phase II (2013) 🗎🗎

I examine in the period 2008-2011 the efficiency of four carbon dioxide (CO2) emission allowance futures traded in the Intercontinental Exchange (ICE). To this end, I assess the profitability of trading strategies based on simple technical analysis rules and naive forecasts. The results from 2010 onwards are consistent with weak market efficiency. In turn, this finding suggests that the European carbon market is gradually attaining a state of maturity. (C) 2012 Elsevier Ltd. All rights reserved.

Who is responsible for the CO2 emissions that China produces? (2013) 🗎🗎

Most climate scientists around the world are concerned about global warming. These concerns have resulted in calls for reductions in CO2 emissions over time. If these calls are to be heeded, an appropriate emissions accounting method must first be agreed upon by CO2 emitting countries, none of which are more important than China. This paper estimates China's CO2 emissions in 2002 and in 2007 using firstly a production-based, and then a consumption-based, accounting method, both in aggregate and at the sectoral industry level. Our objectives are first to investigate the recent trends in Chinese emissions of CO2, and second to reveal the extent of the differences in the estimates produced by these two methods. Our estimates confirm what others have found, namely that Chinese emissions of CO2 increased. substantially over this relatively short time period. Furthermore, the consumption-based method results in China being responsible for 38% fewer emissions in 2007 than would be the case with the production-based method. Problems caused by global warming will only be ameliorated if an acceptable worldwide distribution of responsibilities for emissions reduction efforts can be found. We believe that the consumption based method is more appropriate because it allocates responsibilities according to final consumption. (C) 2013 Elsevier Ltd. All rights reserved.

Taking an option on the future: Subsidizing biofuels for energy security or reducing global warming (2013) 🗎🗎

This paper examines the biofuels industry from a policy and international trade perspective. Across the globe there are two main public policy objectives driving the development of biofuels industries improving energy security and reducing global warming. The US and Canadian governments have respectively fostered biofuels industries for these reasons. As biofuels industries will not be financially viable without government support in the foreseeable future, government policies can be interpreted as taking options on the future. A theoretical model is developed using option value theory to determine whether the same governmental policy (subsidization) can lead to different levels of optimal subsidies in each country, where the subsidy policy is driven by two distinct motivating factors. If the reason subsidy levels differ is structural, the likelihood of a trade dispute arising increases. (C) 2013 Elsevier Ltd. All rights reserved.

REDUCTION OF PM10 EMISSIONS UNDER SCENARIOS OF REGULATION AND AVAILABILITY OF NATURAL GAS IN THE BIO BIO REGION, CHILE (2013) 🗎🗎

The high level of industrial activity in the Bio Bio Region has led to local air pollution problems, due to the high emission levels of particulate matter. The feasibility of bringing liquefied natural gas to the region is under study. This paper compares a system of tradable emissions permits and command and control type regulation for industrial sources considering two alternatives for reducing PM10 emissions: changing the fuel used to natural gas and incorporating air pollution control technologies. It was found that given certain fuel prices, the industries will likely change to natural gas without the need for regulation. Moreover, it was found the maximum price that could be paid whilst retaining the economic attractiveness of this alternative as a cost-effective option for emissions reductions.

An economic and environmental assessment of future electricity generation mixes in Japan - an assessment using the E3MG macro-econometric model (2014) 🗎🗎

In this paper we consider future options for Japanese energy and climate policy. We assess the economic and environmental impacts of changing the share of electricity generated by nuclear power and varying the mid-term GHG targets. The quantitative approach we use is based on the global macro-econometric E3MG model. Our analysis reveals that the cost of denuclearisation to Japanese GDP is close to zero, and for employment the impact is slightly positive. Our results also show a double-dividend effect if (revenue-neutral) carbon taxes are levied in order to meet the GHG reduction targets, and this double-dividend effect is largest in the scenarios without nuclear power. However, our analysis suggests that a very high carbon tax rate would have to be imposed in order to achieve a 25% reduction in GHG emissions in 2020 (compared to 1990 levels) while simultaneously phasing out nuclear power. (C) 2013 Elsevier Ltd. All rights reserved.

Carbon pricing and energy efficiency improvement - why to miss the interaction for developing economies? An illustrative CGE based application to the Pakistan case (2014) 🗎🗎

Carbon/energy taxes and energy efficiency improvement are studied well in the recent years for their potential adverse impacts on economy, especially for lost production and international competitiveness, and rebound effects. However, little attention has been paid to investigate them jointly, which can not only prevent fall of energy services cost and thereby rebound effect but reduce the associated macroeconomic costs. This study thus employs a 20 sector CGE model to explore separately the impacts of carbon tax and its coordinated implementation with energy efficiency improvement on the Pakistan economy. The country underwent enormous pressure of energy security issues as well as climate change fallouts in the last couple of years and can be regarded as a suitable candidate for energy/environmental conservation policies to be considered at a broader context with more concrete efforts. The simulation results show that the impact of carbon tax on GDP is negative but resulting reductions in pollutant emissions are relatively high. Moreover, the GDP is expected to grow comparatively positive when analyzed with improvements in energy efficiency, with even higher decline in energy consumption demand and so emissions. This simultaneous economic and environmental improvement would thus have positive implications regarding sustainable development of the country. (C) 2013 Elsevier Ltd. All rights reserved.

A real options model to evaluate the effect of environmental policies on the oil sands rate of expansion (2014) 🗎🗎

Canadian oil sands hold the third largest recognized oil deposit in the world. While the rapidly expanding oil sands industry in western Canada has driven economic growth, the extraction of the oil comes at a significant environmental cost. It is believed that the government policies have failed to keep up with the rapid oil sands expansion, creating serious challenges in managing the environmental impacts. This paper presents a practical, yet financially sound, real options model to evaluate the rate of oil sands expansion, under different environmental cost scenarios resulting from governmental policies, while accounting for oil price uncertainty and managerial flexibilities. Our model considers a multi-plant/multi-agent setting, in which labor costs increase for all agents and impact their optimal strategies, as new plants come online. Our results show that a stricter environmental cost scenario delays investment, but leads to a higher rate of expansion once investment begins. Once constructed, a plant is highly unlikely to shut down. Our model can be used by government policy makers, to gauge the impact of policy strategies on the oil sands expansion rate, and by oil companies, to evaluate expansion strategies based on assumptions regarding market and taxation costs. (C)2014 Elsevier B.V. All rights reserved.

Forum shopping for ex-post gas-balancing services (2014) 🗎🗎

The patchwork of different imbalance-settlement rules in geographically adjacent gas regions induces shippers to go "forum shopping" to minimize costs of ex-post balancing services. This shopping increases efficiency, and thus welfare of the shippers, on the one hand. The impact on net efficiency is dependent on the relative incentives provided by different balancing mechanisms and the relative system-balancing costs that the transmission-system operators face to offer balancing services to unbalanced shippers, on the other hand. If the gas-balancing mechanism and the system-balancing costs are aligned, net efficiency in the combined gas system will rise. Our results demonstrate that such an outcome is not guaranteed. Hence, market integration without properly checking compatibility of balancing rules can improve shipper efficiency at the cost of reducing overall efficiency. The latter outcome should clearly be avoided by policy makers and European regulators whose primary concern should be overall efficiency as this provides fair and efficient prices for gas consumers and a higher utility for society. (C) 2013 Elsevier Ltd. All rights reserved.

The influence of South Korean energy policy on OPEC oil exports (2014) 🗎🗎

South Korea is the fifth top oil importer worldwide with 64% of its oil coming from OPEC member countries. Over the last 30 years, South-Korea accounted for a rapid increase in energy use. This in turn led South Korea to be totally dependent on oil imports. Due to this increase, South Korea has been experiencing drastic changes in its energy system which could potentially impact its dependence on OPEC oil import. External and internal factors have forced South Korea to change its energy strategy and targets. These targets would be achieved by reducing its energy intensity and utilizing electricity and renewable energies in order to reduce its dependence on oil consumption. "Low Carbon, Green Growth" is one policy along with many other energy policies developed by South Korea for reducing greenhouse gases, thus this policy is receiving a remarkable attention today. These national policies along with other international ones are needed to mitigate greenhouse gas emissions and promote other green initiatives. This study puts emphasis on these policies as well as uses them to predict the future energy profile of South Korea and how these policies will impact on oil imports from OPEC member countries. (C) 2013 Elsevier Ltd. All rights reserved.

Climate policy and the 'carbon haven' effect (2014) 🗎🗎

In a world with uneven climate policies, the carbon price differentials across regions could shift the production of energy-intensive goods from carbon-constrained countries to carbon havens', or countries with laxer climate policy. This would reduce the environmental benefits of the policy (carbon leakage) while potentially damaging the economy (competitiveness concerns). A review on these questions is provided in this article. First we discuss the main terms involved, such as carbon leakage, competitiveness, sectors at risk, or climate spillovers. Then we analyze the studies evaluating the carbon leakage risk. Most ex ante modeling studies conclude to leakage rates in the range of 5-20% (if no option to mitigate leakage is implemented), whereas ex post econometric studies have not revealed statistically significant evidence of leakage. Different policy options to face these issues are then examined with an emphasis on Border Carbon Adjustments (BCA). BCA consist in reducing the carbon price differentials of the goods traded between countries. Properly implemented, they can reduce leakage (by around 10 percentage points in ex ante modeling studies) in a cost-effective way but are controversial because they shift a part of the abatement costs from abating countries to nonabating countries. Their impact on international negotiations is unclear: they could encourage third countries to join the abating coalition or trigger a trade war. Besides, their consistency with World Trade Organization (WTO) rules is contentious among legal experts. (C) 2013 John Wiley & Sons, Ltd.

Ambiguity Reduction by Objective Model Selection, with an Application to the Costs of the EU 2030 Climate Targets (2014) 🗎🗎

I estimate the cost of meeting the EU 2030 targets for greenhouse gas emission reduction, using statistical emulators of ten alternative models. Assuming a first-best policy implementation, I find that total and marginal costs are modest. The statistical emulators allow me to compute the risk premiums, which are small, because the EU is rich and the policy impact is small. The ensemble of ten models allows me to compute the ambiguity premium, which is small for the same reason. I construct a counterfactual estimate of recent emissions without the climate policy and use that to test the predictive skill of the ten models. The models that show the lowest cost of emission reduction also have the lowest skill for Europe in recent times.

Cost and potential of carbon abatement from the UK perennial energy crop market (2014) 🗎🗎

Biomass produced from perennial energy crops is expected to contribute to UK renewable energy targets, reducing the carbon intensity of energy production. The UK government has had incentive policies in place targeting both farmers and power plant investors to develop this market, but growth has been slower than anticipated. Market expansion requires the interaction of farmers growing these crops, with the construction of biomass power plants or other facilities to consume them. This study uses an agent-based model to investigate behaviour of the UK energy crop market and examines the cost of emission abatement that the market might provide. The model is run for various policy scenarios attempting to answer the following questions: Do existing policies for perennial energy crops provide a cost-effective mechanism in stimulating the market to achieve emissions abatement? What are the relative benefits of providing incentives to farmers or energy producers? What are the trade-offs between increased or decreased subsidy levels and the rate and level of market uptake, and hence carbon abatement? The results suggest that maintaining the energy crop scheme, which provides farmers' establishment grants, can increase both the emissions abatement potential and cost-effectiveness. A minimum carbon equivalent abatement cost is seen at intermediate subsidy levels for energy generation. This suggests that there is an optimum level that cost-effectively stimulates the market to achieve emissions reduction.

Does a Change in Price of Fuel Affect GDP Growth? An Examination of the U.S. Data from 1950-2013 (2014) 🗎🗎

We examined data on fuel consumption and costs for the years 1950 through 2013, along with economic and population data, to determine the percent of U. S. gross domestic product (GDP) spent each year on fuels, including fossil fuels and nuclear ore, and the growth of the economy. We found that these variables are inversely correlated. This suggests that the availability and cost of energy is a significant determinant of economic performance. We believe this relation is consistent with analyses based on the energy return on investment (EROI) concept in that increasingly scarce, and hence expensive, fuels are a drag on economic growth. The best-fitting linear equation relating the percent of GDP (energy cost share) and year-over-year (YoY) GDP change variables suggests that a threshold exists in the vicinity of 4%; if the percent of GDP spent on fuels is greater than this, poorer economic performance has been likely. Currently, about 5% of GDP is spent on fuels; most of this is for liquids. Continued weak economic performance appears likely unless improvements in energy efficiency, on the order of a factor of 3 for liquid fuels, and/or a more rapid adoption of renewable or nuclear energy sources can be achieved, provided that the EROI of these new sources proves to be sufficiently high.

Modeling, analysis, and evaluation of a carbon tax policy based on the emission factor (2014) 🗎🗎

This paper studies a tax policy based on the emission factor, which is used as an intensity measure. Specifically, the paper models a situation where policy makers set a limit on the production emission factor of a regulated industry and require firms to pay tax if they exceed that target. The efficiency of the policy is evaluated against other existing environmental policies using a social welfare mathematical programming model. A case study is built within the context of the cement industry and is used to carry out the analysis. The results show that the intensity-based carbon tax achieves the highest consumers' surplus and production quantities and the lowest prices. The policy is found to be effective in reducing CO2 emissions with little impact on social welfare. (C) 2014 Elsevier Ltd. All rights reserved.

Pricing carbon in the US: A model-based analysis of power-sector-only approaches (2014) 🗎🗎

One proposed climate policy is a "power-sector-only" approach that would focus exclusively on controlling carbon dioxide emissions from electricity generation. This paper uses an intertemporal computable general equilibrium model of the world economy called G-Cubed to compare a power-sector-only climate policy with two alternative economy-wide measures that either: (1) place the same price on carbon or (2) achieve the same cumulative emissions reduction as the program limited to the power sector. We find that the power-sector-only approach requires a carbon price to electric utilities that is almost twice the economy-wide carbon price that would achieve the same cumulative emissions. In addition, we find that the power-sector-only policy does not produce offsetting increases in emissions in other sectors or other countries. Rather, we find that domestic carbon emissions outside the power sector fall slightly relative to baseline as higher electricity prices slow overall economic activity. Global emissions leakage is negligible as the price of oil in other currencies changes little. All three policies reduce investment in the capital-intensive energy sector, which lowers imports of durable goods and strengthens the U.S. terms of trade. (C) 2013 Elsevier B.V. All rights reserved.

Estimation and performance evaluation of optimal hedge ratios in the carbon market of the European Union Emissions Trading Scheme (2014) 🗎🗎

Following the introduction of the European Union Emissions Trading Scheme (EU-ETS), CO2 emissions have become a tradable commodity. As a regulated party, emitters are forced to take into account the additional cost of carbon emissions in their production costs structure. Given the high volatility in the carbon price, the importance of price risk management becomes unquestionable. This study is the first attempt that has been made to calculate hedge ratios and to investigate their hedging effectiveness in the EU-ETS carbon market by applying conventional, recently developed estimation models. These hedge ratios are then compared with those derived for other markets. In spite of the uniqueness and novelty of the carbon market, the results of the study are consistent with those found in other markets - that the hedge ratio is in the range of 0.5-1.0 and is still best estimated by simple regression models.

Cross-border electricity market effects due to price caps in an emission trading system: An agent-based approach (2014) 🗎🗎

The recent low CO2 prices in the European Union Emission Trading Scheme (EU ETS) have triggered a discussion whether the EU ETS needs to be adjusted. We study the effects of CO2 price floors and a price ceiling on the dynamic investment pathway of two interlinked electricity markets (loosely based on Great Britain, which already has introduced a price floor, and on Central Western Europe). Using an agent-based electricity market simulation with endogenous investment and a CO2 market (including banking), we analyse the cross-border effects of national policies as well as system-wide policy options. A common, moderate CO2 auction reserve price results in a more continuous decarbonisation pathway. This reduces CO2 price volatility and the occurrence of carbon shortage price periods, as well as the average cost to consumers. A price ceiling can shield consumers from extreme price shocks. These price restrictions do not cause a large risk of an overall emissions overshoot in the long run. A national price floor lowers the cost to consumers in the other zone; the larger the zone with the price floor, the stronger the effect. Price floors that are too high lead to inefficiencies in investment choices and to higher consumer costs. (C) 2014 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license

China's energy security and its challenges towards 2035 (2014) 🗎🗎

Within the last twenty years, China has' become dependent on import of coal, oil and natural gas. Especially oil is now an economic and a security concern by the Chinese regime and key international stakeholders. Until 2035, China will account for one fourth of the global net growth in global gas consumption and more than half of the net growth in oil consumption. The future demand cannot be covered by China's own conventional and unconventional sources. Pipelines from neighboring countries can cover more than half of the needed import of natural gas by 2030, but only 10 percent of the import demand of oil is secured so far. Even if China attempts to address its insufficient supply of oil by increased investments in overseas oil fields, there is still a large gap. Furthermore, the oil import will largely come from politically unstable countries and regions, and the bulk of the supplies must be shipped through the potentially insecure Hormuz and Malacca Straits. The ongoing territorial disputes with neighboring countries regarding areas with gas and oil reserves in contested waters bear evidence to regional conflict potentials, and China appears to engage more actively in energy diplomacy and regional cooperation. (C) 2014 Elsevier Ltd. All rights reserved.

Impact of the Keystone XL pipeline on global oil markets and greenhouse gas emissions (2014) 🗎🗎

Climate policy and analysis often focus on energy production and consumption(1,2), but seldom consider how energy transportation infrastructure shapes energy systems(3). US President Obama has recently brought these issues to the fore, stating that he would only approve the Keystone XL pipeline, connecting Canadian oil sands with US refineries and ports, if it 'does not significantly exacerbate the problem of carbon pollution'(4). Here, we apply a simple model to understand the implications of the pipeline for greenhouse gas emissions as a function of any resulting increase in oil sands production. We find that for every barrel of increased production, global oil consumption would increase 0.6 barrels owing to the incremental decrease in global oil prices. As a result, and depending on the extent to which the pipeline leads to greater oil sands production, the net annual impact of Keystone XL could range from virtually none to 110 million tons CO2 equivalent annually. This spread is four times wider than found by the US State Department (1-27 million tons CO(2)e), who did not account for global oil market effects(5). The approach used here, common in lifecycle analysis(6), could also be applied to other pending fossil fuel extraction and supply infrastructure.

Designing an emissions trading scheme for China An up-to-date climate policy assessment (2014) 🗎🗎

We assess recent Chinese climate policy proposals in a multi-region, multi-sector computable general equilibrium model with a Chinese carbon emissions trading scheme (ETS). When the emissions intensity per GDP in 2020 is required to be 45% lower than in 2005, the model simulations indicate that the climate policy induced welfare loss in 2020, measured as the level of GDP and welfare in 2020 under climate policy relative to their level under business-as-usual (BAU) in the same year, is about 1%. The Chinese welfare loss in 2020 slightly increases in the Chinese rate of economic growth in 2020. When keeping the emissions target fixed at the 2020 level after 2020 in absolute terms, the welfare loss will reach about 2% in 2030. If China's annual economic growth rate is 0.5 percentage points higher (lower), the climate policy-induced welfare loss in 2030 will rise (decline) by about 0.5 percentage points. Full auctioning of carbon allowances results in very similar macroeconomic effects as free allocation, but full auctioning leads to higher reductions in output than free allocation for ETS sectors. Linking the Chinese to the European ETS and restricting the transfer volume to one third of the EU's reduction effort creates at best a small benefit for China, yet with smaller sectoral output reductions than auctioning. These results highlight the importance of designing the Chinese ETS wisely. (C) 2014 Elsevier Ltd. All rights reserved.

The reform of the European energy tax directive: Exploring potential economic impacts in the EU27 (2014) 🗎🗎

The aim of this study is to analyze the effect that the Energy Tax Directive reform proposed in 2011 would have, if implemented, on the level of prices in the different sectors of the 27 countries of the European Union. We apply a multiregional and multisectoral model of trade flows that takes into account all the intersectoral and intercountry interdependences in the production processes. Using the World Input-Output Database we perform two different simulations. The first one considers the tax changes proposed by the reform; the second one shows the impact the reform would have entailed if it were applied also to sectors belonging to the European Trade System. The main finding of the first simulation shows that the new energy tax regime would have had a low economic cost in terms of impact on prices (less than 1% in all the countries). So, the concerns about competitiveness do not find empirical support in our results, suggesting the need for further analyses to find out the reasons that caused the failure of a reform that was an important step to introduce a taxation explicitly linked to CO2 emissions. The second simulation, however, leads to strongly different results, pointing out the relevance of maintaining significant economic incentives to reduce carbon emissions for the European Trade System sectors, by improving the emission market performance or by applying carbon taxation also to these sectors. (C) 2014 Elsevier Ltd. All rights reserved.

A sustainable "building block"?: The paradoxical effects of thermal efficiency on US power plants' CO2 emissions (2014) 🗎🗎

Under its recently proposed Clean Power Plan, the U.S. Environmental Protection Agency (EPA) gives states several "building blocks" to choose from to reduce their power plants' CO2 emissions, including improving plants' heat rate efficiency. However, skeptics suggest that precisely because efficiency enhances electrical output, it may reduce power plants' emission rates but increase their emission levels. Using the EPA's new Greenhouse Gas Reporting Program (GHGRP) data, this paper conducts the first analysis of the effect of thermal efficiency on the rate and level at which individual power plants emit carbon dioxide. Consistent with the arguments of skeptics, we find that while efficiency lowers CO2 emission rates, it actually increases CO2 emission levels. In suggesting to states that improving efficiency is one of the best systems of emission reductions, therefore, the EPA needs to consider whether more efficient plants are subject to such "rebound effects." (C) 2014 Elsevier Ltd. All rights reserved.

US biofuels subsidies and CO2 emissions: An empirical test for a weak and a strong green paradox (2014) 🗎🗎

Using energy data over the period 1981-2011 we find that US biofuels subsidies and production have provided a perverse incentive for US fossil fuel producers to increase their rate of extraction that has generated a weak green paradox. Further, in the short-run if the reduction in the CO2 emissions from a one-to-one substitution between biofuels and fossil fuels is less than 26 percent, or less than 57 percent if long run effect is taken into account, then US biofuels production is likely to have resulted in a strong green paradox. These results indicate that subsidies for first generation biofuels, which yield a low level of per unit CO2 emission reduction compared to fossil fuels, might have contributed to additional net CO2 emissions over the study period. (C) 2013 Elsevier Ltd. All rights reserved.

Non-separable pollution control: Implications for a CO2 emissions cap and trade system (2014) 🗎🗎

The federal government now confronts considerable political pressure to add CO2 to the existing set of criteria air pollutants. As with current criteria pollutants, proposals call for control of CO2, assuming that the control of each of the three criteria pollutants is separable from the others. However, control of CO2, SO2, and NOX emissions is most appropriately viewed as joint rather than separable based on engineering relationships. Empirically, we also find considerable jointness. Using a 10-year panel for 77 U.S. electric utilities, which comprise the largest sector in terms of energy-related CO2 emissions, we estimate a multiple-input, multiple-output directional distance function combining good inputs (production capital, pollution control capital, labor, and energy) and a bad input (sulfur burned) to produce good outputs (residential and industrial/commercial electricity production) and bad outputs (SO2, NOX, and CO2). We find that while utilities do not directly control CO2 emissions, considerable jointness exists across SO2, NOx, and CO2 emissions. Failure to account for this jointness increases the cost of pollution control, making it less acceptable to the public and policymakers. We also compute the technical efficiency of our set of utilities and find that considerable cost savings can be achieved by adopting the best technology for production of electricity and reduction of pollutants. (C) 2013 Elsevier B.V. All rights reserved.

Energy efficiency and capital-energy substitutability: Evidence from four OPEC countries (2014) 🗎🗎

Rapid economic growth and development in several oil-exporting developing countries have led to increasing energy consumption and the accompanying greenhouse gas (GHG) emissions. Consequently, a good understanding of the nature and structure of energy use in developing economies is required for future energy and climate change policies. To this end, a modified translog cost function is employed in this paper to estimate energy efficiency for selected members of the Organization of the Petroleum Exporting Countries (OPEC) over the period 1972-2010. This also allows for the estimation of energy-capital substitutability, which arguably reflects the likely ease/disruption to long-term growth arising from policy measures aimed at reducing energy consumption and GHG emissions. The estimated results show that energy efficiency gains range from -14% to 13% for sampled countries. Furthermore, factor substitution elasticities suggest that energy and capital are substitutes in Algeria and Saudi Arabia, but are found to be complements in Iran and Venezuela. The insight generated by this study is that, over the last four decades, energy efficiency improvements in selected OPEC countries are modest, possibly reflecting a "subsidy effect" arising from artificially low energy prices. Thus, policy makers should take note that measures aimed at conserving energy need to internalize the environmental cost arising from energy consumption using pricing and fiscal instruments such as carbon taxes. (C) 2014 Elsevier Ltd. All rights reserved.

The game of trading jobs for emissions (2014) 🗎🗎

Following the debate on the implications of international trade for global climate policy, this paper introduces the topic of the economic benefits from trade obtained by exporting countries in relation to the emissions generated in the production of exports. In 2008, 24% of global greenhouse gas (GHG) emissions and 20% of the employment around the world were linked to international trade. China "exported" 30% of emissions and hosted 37.5% of the jobs generated by trade worldwide. The European Union and the United States of America were the destination of 25% and 18.4% of the GHG emissions embodied in trade. The imports of these two regions contributed to the creation of 45% of the employment generated by international trade. This paper proposes the idea of including trade issues in international climate negotiations, taking into account not only the environmental burden generated by developed countries when displacing emissions to developing countries through their imports, but also the economic benefits of developing countries producing the goods exported to developed countries. (C) 2013 Elsevier Ltd. All rights reserved.

Taxing Energy Use in the OECD (2014) 🗎🗎

This article compares effective tax rates, in energy and carbon terms, on the full spectrum of energy use across the OECD, highlighting notable differences in the taxation of energy in OECD countries. The analysis strongly suggests that current taxes are not well geared towards attaining environmental, budgetary and distributional policy objectives. Incoherencies from an environmental policy perspective include the lower taxation of diesel relative to gasoline for road use and the low tax rates applied to many fuels employed for heating and process use, and particularly to coal, which has considerably higher emissions of carbon and air pollutants per unit of energy than other fuels.

A comparison of carbon allocation schemes: On the equity-efficiency tradeoff (2014) 🗎🗎

In the long-term stabilization targets of greenhouse gases concentrations, various carbon emission rights allocation schemes have been proposed. To compare and evaluate them, the most essential is the equity-efficiency tradeoff. This paper measures the equity and the efficiency in the global rather than the narrower national perspective. Specifically, the equity of the first allocation is quantified by the carbon Gini coefficient defined by per capita cumulative emission, and the economic efficiency to accomplish obligations is described with the discounted global abatement costs. Under 20 key allocation schemes, the numerical comparison on the equity-efficiency tradeoff side is carried out through the Equitable Access to Sustainable Development model. Our studies indicate that the equity and the efficiency of future emission space allocation approximately show a three-stage relationship. (C) 2014 Elsevier Ltd. All rights reserved.

A strategic decision-making model considering the social costs of carbon dioxide emissions for sustainable supply chain management (2014) 🗎🗎

Incorporating sustainability into supply chain management has become a critical issue driven by pressures from governments, customers, and various stakeholder groups over the past decade. This study proposes a strategic decision-making model considering both the operational costs and social costs caused by the carbon dioxide emissions from operating such a supply chain network for sustainable supply chain management. This model was used to evaluate carbon dioxide emissions and operational costs under different scenarios in an apparel manufacturing supply chain network. The results showed that the higher the social cost rate of carbon dioxide emissions, the lower the amount of the emission of carbon dioxide. The results also suggested that a legislation that forces the enterprises to bear the social costs of carbon dioxide emissions resulting from their economic activities is an effective approach to reducing carbon dioxide emissions. (C) 2013 Elsevier Ltd. All rights reserved.

APPLICATION OF THE CARBON EMISSION PRICING MODEL IN THE KOREAN MARKET (2014) 🗎🗎

The international debate on carbon emission reduction to mitigate the global warming phenomenon has focused the attention of scholars and policy makers on finding rational solutions. The optimal level of carbon emission is determined by the equilibrium carbon emission price, where the marginal damage by climate change is equal to the marginal cost of carbon emission reduction. This study has been conducted because the international trade of carbon emission allowances requires the optimal carbon emission prices of each region to be estimated. By using the carbon emission pricing model of Nordhaus (1991), which considers both economic and environmental factors, this study estimates the optimal carbon emission prices in the Korean market, which is expected to play a crucial role in carbon emission pricing power regionally and internationally due to the passage of the "Act on the Allocation and Trading of Greenhouse-Gas Emission Permits" on May 2, 2012. We find that the marginal cost of carbon emission reduction generally increases with increasing sensitivity of temperature to concentrations of carbon emission and with increasing economic growth rate, but decreases with increasing real capital return.

Design of Pareto optimal CO2 cap-and-trade policies for deregulated electricity networks (2014) 🗎🗎

Among the CO2 emission reduction programs, cap-and-trade (C&T) is one of the most used policies. Economic studies have shown that C&T policies for electricity networks, while reducing emissions, will likely increase price and decrease consumption of electricity. This paper presents a two layer mathematical-statistical model to develop Pareto optimal designs for CO2 cap-and-trade policies. The bottom layer finds, for a given C&T policy, equilibrium bidding strategies of the competing generators while maximizing social welfare via a DC optimal power flow (DC-OPF) model. We refer to this layer as policy evaluation. The top layer (called policy optimization) involves design of Pareto optimal C&T policies over a planning horizon. The performance measures that are considered for the purpose of design are social welfare and the corresponding system marginal price (MP), CO2 emissions, and electricity consumption level. (C) 2014 Elsevier Ltd. All rights reserved.

Consequential Life Cycle Assessment of Policy Vulnerability to Price Effects (2014) 🗎🗎

The application of life cycle assessment (LCA) in a policy context highlights the need for a "consequential" LCA (CLCA), which differs from an "attributional" LCA (ALCA). Although CLCA offers some advantages over ALCA, such as a capacity to account for emissions resulting from both substitution and price effects, it entails additional assumptions and cost and may yield estimates that are more uncertain (e.g., estimates of impact of biofuel policies on greenhouse gas [GHG] emissions). We illustrate how a CLCA that relies on simple partial equilibrium models could provide important insights on the direction and magnitude of price effects while limiting the complexity of CLCA. We describe how such a CLCA, when applied early in the policy life cycle, could help identify policy formulations that reduce the magnitude of adverse price effects relative to the beneficial substitution effect on emissions because-as the experience with biofuel regulations indicates-regulating price effects is costly and controversial. We conclude that the salient contribution of CLCA in the policy process might lie in warning policy makers about the vulnerabilities in a policy with regard to environmental impact and to help modify potentially counterproductive formulations rather than in deriving the precise estimates for uncertain variables, such as the life cycle GHG intensity of product or average indirect emissions.

The implications of phasing out energy subsidies in Egypt (2014) 🗎🗎

Due to the distortions they create, the Egyptian government finally decided to phase out energy subsidies. This paper is an attempt to assess the dynamic and welfare implications of phasing energy subsidies. The paper also attempts to evaluate a number of policies designed to reduce the burden of phasing out energy subsidies on consumers. A policy of gradual elimination of energy subsides combined with gradual elimination of tariffs is found to reduce the burden of subsidy removal substantially. (C) 2014 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

REVIEW OF CARBON EMISSIONS TRADING PILOTS IN CHINA (2014) 🗎🗎

China's carbon emissions trading pilot schemes have already made significant progress, with five out of the seven pilot systems having started operation by the end of 2013. The experience in establishing and operating the pilot schemes will be valuable to the establishment of China's unified national emissions trading system in the near future. Design features of the five pilots are analyzed and compared, based on officially published documents. Aspects discussed include the establishment of the emissions cap, sector coverage, allowance allocation, data basis, compliance rules, monitoring/reporting/verification (MRV) mechanism, market intervention, offset mechanism, stakeholder consultations and legal basis. These systems are somewhat similar in cap setting, MRV mechanism and offset mechanism, but quite different in allocation approaches and market intervention. The schemes differ as well from existing international schemes as for example the European Emission Trading Scheme (EU ETS). Reasons for the different designs are briefly analyzed in a comparative manner.

The global metabolic transition: Regional patterns and trends of global material flows, 1950-2010 (2014) 🗎🗎

Since the World War II, many economies have transitioned from an agrarian, biomass-based to an industrial, minerals-based metabolic regime. Since 1950, world population grew by factor 2.7 and global material consumption by factor 3.7-71 Gigatonnes per year in 2010. The expansion of the resource base required by human societies is associated with growing pressure on the environment and infringement on the habitats of other species. In order to achieve a sustainability transition, we require a better understanding of the currently ongoing metabolic transition and its potential inertia. In this article, we present a long-term global material flow dataset covering material extraction, trade, and consumption of 177 individual countries between 1950 and 2010. We trace patterns and trends in material flows for six major geographic and economic country groupings and world regions (Western Industrial, the (Former) Soviet Union and its allies, Asia, the Middle East and Northern Africa, Latin America and the Caribbean, and Sub-Saharan Africa) as well as their contribution to the emergence of a global metabolic profile during a period of rapid industrialization and globalization. Global average material use increased from 5.0 to 10.3 tons per capita and year (t/cap/a) between 1950 and 2010. Regional metabolic rates range from 4.5 t/cap/a in Sub-Saharan Africa to 14.8 t/cap/a in the Western Industrial grouping. While we can observe a stabilization of the industrial metabolic profile composed of relatively equal shares of biomass, fossil energy carriers, and construction minerals, we note differences in the degree to which other regions are gravitating toward a similar form of material use. Since 2000, Asia has overtaken the Western Industrial grouping in terms of its share in global resource use although not in terms of its per capita material consumption. We find that at a sub-global level, the roles of the world regions have changed. There are, however, no signs yet that this will lead to stabilization or even a reduction of global resource use. (C) 2014 The Authors. Published by Elsevier Ltd.

Subsidy modes, waste cooking oil and biofuel: Policy effectiveness and sustainable supply chains in China (2014) 🗎🗎

Many countries are concerned with the waste-to-energy for economic development and societal welfare. This paper constructs a dynamic game model that, for the first time compares the incentive effects of four common subsidy modes on waste cooking oil supply for biofuel refining and sales of waste cooking oil refined products. The model considers the impact of preferential tax treatment, a raw material subsidy, a sales subsidy and an investment subsidy on the profits of biofuel enterprises and waste cooking oil recyclers. Results indicate that common approaches adopted in developed economies such as raw material price subsidies and finished products sales subsidies increase the profits of both biofuel enterprises and recyclers. On the contrary, investment subsidies, which are relatively common in some regions of China, increase the profits of recyclers, while reducing revenues achieved by biofuel enterprises. To promote the supply chain, policy should give priority to raw material price subsidies and finished products sales subsidies, and for investment subsidies, however, the government should be cautious. Crown Copyright (C) 2013 Published by Elsevier Ltd. All rights reserved.

A low growth path in Austria: potential causes, consequences and policy options (2014) 🗎🗎

This paper reports on an Austrian research project that deals with the question how the Austrian society could cope with long-lasting low economic growth. Various causes of low-growth that are relevant for Austria (a deteriorating balance of trade, increasing resource prices, consumer restraint of households and less immigration) have been identified, leading to an only moderate gross domestic product growth of 0.55 % per year. The resulting impact on the economy is substantial: the labour market suffers from a shortage of labour supply (due to reduced migration) and from a reduced demand for labour (due to reduced demand in consumption, investments and exports). Subsequently, less employment decreases the development of the disposable income of private households (tax rates and social security contributions held constant). Related to this, public debt is higher due to reduced tax incomes and slightly growing public expenditures. From an ecological perspective, resource consumption increases at a slower rate, however, no absolute reduction can be reached. CO2 emissions also slightly increase. Therefore, it cannot be assumed that low growth necessarily leads to the achievement of energy and environmental policy goals. Based on these results, a policy scenario was used to analyze whether and how policy measures are able to cope with the negative consequences of persistent low growth. The results reveal that the selected measures are suitable to reduce negative economic effects: The implementation of reduced working time and an eco-social reform of levies might improve the labour market situation. The negative effects on the national budget can be diminished by a reduction of environmentally harmful subsidies. Induced behaviour changes of private households can reduce energy and resource-intensive consumption.

Should we be worried about the green paradox? Announcement effects of the Acid Rain Program (2014) 🗎🗎

This paper presents the first empirical test of the green paradox hypothesis, according to which well-intended but imperfectly implemented environmental policies may lead to detrimental outcomes due to supply side responses. We use the introduction of the Acid Rain Program in the U.S. as a case study. The theory predicts that owners of coal deposits, expecting future sales to decline, would supply more of their resource between the announcement of the Acid Rain Program and its implementation; moreover, the incentive to increase supply would be stronger for owners of high-sulfur coal. This would, all else equal, induce an increase in sulfur dioxide emissions. Using data on prices, heat input and sulfur content of coal delivered to U.S. power plants, we find strong evidence of a price decrease and of an increase in the sulfur premium, some indication that the amount of coal used might have increased, and no evidence of fuel-switching towards higher-sulfur coal. Overall, our evidence suggests that while the mechanism indicated by the theory might be at work, market conditions and concurrent regulation largely prevented a green paradox from arising. These results have implications for the design of climate policies. (C) 2013 Elsevier B.V. All rights reserved.

The Short-Term Impact of a Domestic Cap-and-Trade Climate Policy on Local Agriculture: A Policy Simulation with Producer Behavior (2014) 🗎🗎

This study is intended to develop understanding of possible impact of a domestic cap-and-trade climate policy on local agriculture. We focus the study on the transition period after the policy has raised input prices for production but before establishment of new equilibrium in agricultural commodity markets. We construct a policy simulation model based on production economics that explicitly considers producer behavior in the focal period. We apply the model to a production region in the US to quantify the impact of different levels of carbon price on production cost, production value, and farm income. Our case study shows that: (1) producers have ability to alleviate the cost impact, (2) producers may benefit by selling carbon credits in the carbon market but the revenue is likely to be limited, (3) the economic return of farm production is critical to the impact assessment, (4) the impact may vary across producers, and (5) regulation on the fertilizer industry is an important policy element that can influence the assessment of the impact. This study has important implications for climate policy design.

CONVERGENCE BETWEEN THE EORA, WIOD, EXIOBASE, AND OPENEU'S CONSUMPTION-BASED CARBON ACCOUNTS (2014) 🗎🗎

In this paper, we take an overview of several of the biggest independently constructed global multi-regional input-output (MRIO) databases and ask how reliable and consonant these databases are. The key question is whether MRIO accounts are robust enough for setting environmental policies. This paper compares the results of four global MRIOs: Eora, WIOD, EXIOBASE, and the GTAP-based OpenEU databases, and investigates how much each diverges from the multi-model mean. We also use Monte Carlo analysis to conduct sensitivity analysis of the robustness of each accounts' results and we test to see how much variation in the environmental satellite account, rather than the economic structure itself, causes divergence in results. After harmonising the satellite account, we found that carbon footprint results for most major economies disagree by < 10% between MRIOs. Confidence estimates are necessary if MRIO methods and consumption-based accounting are to be used in environmental policy-making at the national level.

Capturing the macroeconomic impact of technology-based greenhouse gas mitigation in agriculture: a computable general equilibrium approach (2014) 🗎🗎

The importance of greenhouse gas (GHG) emissions related to agriculture is gaining momentum in the climate change policy debate, as evidenced by the European Effort Sharing Decision. Food production is important to economic sustainability in many regions and therefore GHG mitigation in agriculture will have notable macroeconomic implications. A theoretically consistent and tractable framework capturing the link between GHG abatement in primary food production and the wider economy is essential to GHG mitigation strategy development in such regions. Computable general equilibrium (CGE) models provide a straightforward approach to compare the economic and environmental impacts of price/quantity-type policy instruments to meet emission abatement obligations. However, capturing changes to emission intensity associated with agriculture is not nearly as developed in the CGE literature, which has focused on the energy sector. This paper considers alternative approaches to modelling abatement technology in a CGE framework, and illustrates an approach that utilizes standard models available to explore strategic implications of local-regional abatement options. The case study considered is Northern Ireland, a small regional economy with a relatively large proportion of economic activity related to the food supply chain.

Low climate stabilisation under diverse growth and convergence scenarios (2014) 🗎🗎

In the last decade a number of papers have analysed the consequences of achieving the greenhouse gas concentration levels necessary to maintain global temperature increases below 2 degrees C above preindustrial levels. Most models and scenarios assume that future trends in global GDP will be similar to the growth experienced in the past century, which would imply multiplying current output by about 19 times in the 21st century. However, natural resource and environmental constraints suggest that future global economic growth may not be so high. Furthermore, the environmental implications of such growth depend on how it is distributed across countries. This paper studies the implications on GHG abatement policies of low global GDP growth and high convergence levels in GDP per capita across countries. A partial equilibrium model (POLES) of the world's energy system is used to provide detailed projections up to 2050 for the different regions of the world. The results suggest that while low stabilisation could be technically feasible and economically viable for the world in all the scenarios considered, it is more likely to occur with more modest global growth. However, that will imply higher global abatement costs relative to GDP. Convergence in living standards on the other hand places greater pressures in terms of the required reduction in emissions. In general we find that there are major differences between regions in terms of the size and the timing of abatement costs and economic impact. (C) 2013 Elsevier Ltd. All rights reserved.

The perverse fossil fuel subsidies in China-The scale and effects (2014) 🗎🗎

To address the problem of climate change, G-20 government leaders committed to "rationalize and phase-out inefficient fossil fuel subsidies that encourage excessive consumption over the medium term", i.e., removing the perverse subsidies. Considering China's particular circumstances and the purposes of energy subsidies, the perverse fossil fuel subsidies in China mainly concentrated on industries, and gasoline, diesel and natural gas consumption, which are always regressive. Other subsidies, such as those for residential electricity consumption and agriculture, should be kept for the time being. Results indicate that China's perverse fossil fuel subsidies amounted to CNY 509.22 billion in 2008, equivalent to 61.2% of total fossil fuel subsidies and 1.69% of GDP in that year. In addition, reasonable subsidies will not affect energy conservation and emission reduction. Furthermore, CGE (Computable General Equilibrium) model is used to analyze the impacts of energy subsidy reforms. Our finding shows that removing perverse energy subsidies will result in a significant decline in energy demand and CO2 emissions, but will have negative impacts on the macro-economy. Therefore, supporting (or offsetting) policies, like carrying out other cost-benefit and sustainable programs with the revenues saved from subsidy reduction, are needed to alleviate the adverse impacts of removing perverse subsidies. (C) 2014 Elsevier Ltd. All rights reserved.

Introducing carbon taxes in South Africa (2014) 🗎🗎

South Africa is considering introducing a carbon tax to reduce greenhouse gas emissions. Following a discussion of the motivations for considering a carbon tax, we evaluate potential impacts using a dynamic economywide model linked to an energy sector model including a detailed evaluation of border carbon adjustments. Results indicate that a phased-in carbon tax of US$30 per ton of CO2 can achieve national emissions reductions targets set for 2025. Relative to a baseline with free disposal of CO2, constant world prices and no change in trading partner behavior, the preferred tax scenario reduces national welfare and employment by about 1.2 and 0.6 percent, respectively. However, if trading partners unilaterally impose a carbon consumption tax on South African exports, then welfare/employment losses exceed those from a domestic carbon tax, South Africa can lessen welfare/employment losses by introducing its own border carbon adjustments. The mode for recycling carbon tax revenues strongly influences distributional outcomes, with tradeoffs between growth and equity. (C) 2013 The Authors. Published by Elsevier Ltd. All rights reserved.

Biofuels, tax policies and oil prices in France: Insights from a dynamic CGE model (2014) 🗎🗎

The 2009 Renewable Energies Directive (RED) has set up ambitious targets concerning biofuel consumption in the European Union by 2020. Nevertheless, budgetary constraints and growing concerns about the environmental integrity of first-generation biofuels have imposed a phasing out of the fiscal instruments to promote them. Focusing on France, this paper combines an exogenous increase in oil prices and tax policies on fossil fuels. The objective is to determine the efficiency of an alternative incentive scheme for biodiesel consumption based on a higher price of the fossil fuel substitute. Policy simulations are implemented through a dynamic computable general equilibrium (CGE) model calibrated on 2009 French data. The results show that the 10% biodiesel mandate set by the RED would not be achieved even if the fixed taxes on diesel reach the same level as those on gasoline. Although integrating the rise in oil prices into the fiscal framework improves the biodiesel penetration rate, it remains below the target. Moreover, we find that the effects of biofuel consumption are limited to the biofuel chain sectors. In other agricultural sectors, the substitution effect of biodiesel with diesel is partially offset by the pricing effect induced by higher energy ptoduction costs. (C) 2013 Elsevier Ltd. All rights reserved.

Downstream regulation of CO2 emissions in California's electricity sector (2014) 🗎🗎

This paper examines the implications of alternative forms of cap-and-trade regulations on the California electricity market. Specific focus is given to the implementation of a downstream form of regulation known as the first-deliverer policy. Under this policy, importers (i.e., first-deliverers) of electricity into California are responsible for the emissions associated with the power plants from which the power originated, even if those plants are physically located outside of California. We find that, absent strict non-economic barriers to changing import patterns, such policies are extremely vulnerable to reshuffling of import resources. The net impact implies that the first-deliverer policies will be only marginally more effective than a conventional source-based regulation. (C) 2013 Elsevier Ltd. All rights reserved.

Multi-objective regulations on transportation fuels: Comparing renewable fuel mandates and emission standards (2015) 🗎🗎

We compare two types of fuel market regulations a renewable fuel mandate and a fuel emission standard that could be employed to simultaneously achieve multiple outcomes such as reduction in fuel prices, fuel imports and greenhouse gas (GHG) emissions. We compare these two types of regulations in a global context taking into account heterogeneity in carbon content of both fossil fuels and renewable fuels. We find that although neither the ethanol mandate nor the emission standard is certain to reduce emissions relative to a business-as-usual baseline, at any given level of biofuel consumption in the policy region, a mandate, relative to an emission standard, results in higher GHG emissions, smaller expenditure on fuel imports, lower price of ethanol-blended gasoline and higher domestic fuel market surplus. This result holds over a wide range of values of model parameters. We also discuss the implications of this result to a regulation such as the US Renewable Fuel Standard given recent developments within the US such as increase in shale and tight oil production and large increase in average vehicle fuel economy of the automotive fleet. (c) 2015 Elsevier B.V. All rights reserved.

Environmental taxes and international spillovers: The case of a small open economy (2015) 🗎🗎

In the existence of trade interaction, a sub-global climate change policy can generate externality, which can cause competitiveness issues for the producers in compliant regimes. However among compliant regions, a small economy also receives a significant spillins effect when a large economy takes some regulatory actions that affect, particularly, the world prices of traded commodities. This externality can have notable impacts on the efficiency and pollution abatement opportunities of the small compliant regime with a trivial converse effect. In some cases, these impacts on the efficiency and emissions abatement can be in opposite directions. We capture these findings by incorporating two protection polices (i.e., border tax adjustment and free emissions allocations to emission-intensive and trade exposed industries) in a multi-region analytical and numerical general equilibrium modeling framework. These results convey that the large economies hold leading strategic positions towards a cooperative global climate change movement because of their policies' influences on the small economies. (C) 2014 Elsevier B.V. All rights reserved.

Local employment impact from competing energy sources: Shale gas versus wind generation in Texas (2015) 🗎🗎

The rapid development of both wind power and of shale gas has been receiving significant attention both in the media and among policy makers. Since these are competing sources of electricity generation, it is informative to investigate their relative merits regarding local job creation. We use a panel econometric model to estimate the historical job-creating performance of wind versus that of shale oil and gas. The model is estimated using monthly county level data from Texas from 2001 to 2011. Both first-difference and GMM methods show that shale-related activity has brought strong employment to Texas. For example, based on the 5482 new directional/fractured wells drilled in Texas in 2011, the estimates imply that between 25,000 and 125,000 net jobs were created in that year alone. We did not, however, find a corresponding impact on wages. Our estimations did not identify a non-negligible impact from the wind industry on either local employment or wages. (C) 2015 Elsevier B.V. All rights reserved.

Energy-tax changes and competitiveness: The role of adaptive capacity (2015) 🗎🗎

This paper estimates the effect of energy tax (and price) changes on Total Factor Productivity (TFP) and net trade at the industry level, using a panel of industries from European countries covering the period 1990-2003. We investigate the hypothesis that industries with high adaptive capacity (measured by their relative level of labour compensation) are able to mitigate the adverse effects of energy tax rises better than others. We identify the pro-adaptation effect by interacting wage levels (a proxy for human capital) with energy taxes. We find that the negative marginal effect of higher energy taxes on TFP and net trade is significantly reduced for industries with stronger human capital and even turns to an overall positive effect in at least two cases. Up to three low-wage sectors display an overall negative effect. This suggests that human capital is key to adaptation to higher energy costs and climate policy, in some cases making it a win-win. (C) 2014 Elsevier B.V. All rights reserved.

Emission abatement: Untangling the impacts of the EU ETS and the economic crisis (2015) 🗎🗎

In this study we use historical emission data from installations under the European Union Emissions Trading System (EU ETS) to evaluate the impact of this policy on greenhouse gas emissions during the first two trading phases (2005-2012). As such the analysis seeks to disentangle two causes of emission abatement: that attributable to the EU ETS and that attributable to the economic crisis that hit the EU in 2008/09. To do so, we use a dynamic panel data approach. Our results suggest that, by far, the biggest share of abatement was attributable to the effects of the economic crisis. This finding has serious implications for future policy adjustments affecting core elements of the EU ETS, including the distribution of EU emission allowances. (C) 2015 Elsevier B.V. All rights reserved.

Impact analysis of coal-electricity pricing linkage scheme in China based on stochastic frontier cost function (2015) 🗎🗎

This study evaluates the feasibility and fairness of 2012 amendment to coal-electricity pricing linkage policy in China. Our empirical design is based on several stochastic frontier cost functions and the results show that the amended pricing linkage scheme is a double-edged sword as follows. On the one hand, it provides incentives for less-efficient (with efficiency less than 90%) power plants to increase their efficiency. One the other hand, it imposes a penalty to highly-efficient power plants (with efficiency more than 90%). And even worse, the higher the efficiency is, the bigger the penalty will be. To make the current coal-electricity pricing linkage scheme more feasible, we suggest the threshold value of 5 instead of 10%, and a group specific threshold value instead of the current one-size-for-all practice. (C) 2015 Elsevier Ltd. All rights reserved.

Assessing the role of renewable energy policies in landfill gas to energy projects (2015) 🗎🗎

Methane (CH4) is the second most prevalent greenhouse gas and has a global warming potential at least 28 times as high as carbon dioxide (CO2). In the United States, Municipal Solid Waste (MSW) landfills are reported to be the third-largest source of human-made methane emissions, responsible for 18% of methane emissions in 2011. Capturing landfill gas (LFG) for use as an energy source for electricity or heat produces alternative energy as well as environmental benefits. A host of federal and state policies encourage the development of landfill gas to energy (LFGE) projects. This research provides the first systematic economic assessment of the role of these policies on adoption decisions. Results suggest that Renewable Portfolio Standards and investment tax credits have contributed to the development of these projects, accounting for 13 of 277 projects during our data period from 1991 to 2010. These policy-induced projects lead to 10.4 MMTCO(2)e reductions in greenhouse gas emissions and a net benefit of $41.8 million. (C) 2015 Elsevier B.V. All rights reserved.

Interactions between trade and environmental policies in the Czech Republic (2015) 🗎🗎

The Czech Republic is obliged to implement pollution charges in accordance with the EU environmental policy. The charges may affect international competitiveness of the country, since they are applied to the domestically produced, but not to the imported commodities. We investigate how such environmental taxation of six main pollutants affects the Czech competitiveness. Using computable general equilibrium modeling with bottom-up approach, we consider a small-open economy with endogenous unemployment and ten types of taxes. A distinction between taxes on products and taxes on production is essential for analysis of a fiscal policy. Emissions reduction is possible in our model either through substitution with less polluting inputs, or a reduction of output, or through technical abatement. The last channel for emission reduction is ignored by other studies. The results show that the imports should not be affected by the tax reform, except for coal. Exports will increase in the non-energy-intensive and the biomass industries, but it will decrease in the chemical, the coal, and the metal industries. The overall effect on the trade balance is slightly negative. We conclude that investments in energy-saving technologies are necessary in order to preserve international competitiveness.

Labour forced impacts and production losses due to the 2013 flood in Germany (2015) 🗎🗎

During May and June 2013 heavy rains caused disastrous floods in several countries in Europe. In this study we use a new high-resolution model of the German economy to simulate the post-disaster economic shock of the flood. Due to the heavy reliance of modern economies on inter regional supply chains, substantial economic impacts are felt in states and industries outside the flooded area. Cessation of export from one industry, for example in Bayern, in the wake of the flood affects many other industries and regions. Trade links are broken immediately and cause shortages. Supply restrictions from those industries spread further, reducing production possibilities in the national and global economy. Industry-and region specific direct impacts are estimated from time series data about compensations of lost working hours from social insurance schemes in the case of external events such as business cycles and natural disasters. We estimate the total indirect loss of production possibilities that affect in particular the motor vehicle and food industries in Baden-Wurttemberg, Nordrhein-Westfalen and Niedersachsen, but also foreign production, to be [SIC]6.2 billion. Regions and industries outside the flooded area experience around [SIC]400 million of the loss. We find the economic impact of the flood to be much higher as in previous studies and mitigation is more likely to be considered if this effect is taken into account. (C) 2015 Elsevier B.V. All rights reserved.

How carbon offsetting scheme impacts the duopoly output in production and abatement: analysis in the context of carbon cap-and-trade (2015) 🗎🗎

In the context of addressing climate change, the carbon emission trading scheme has become one of the main measures adopted by many countries and regions to achieve emission reduction goals. Noticing this current lack of research, based on a duopoly model, this paper quantitatively explores the impact of carbon offsetting scheme on both emission trading participants' profits and industry's output by drawing on advanced experience of carbon offsetting scheme from developed countries, such as US, Switzerland and EU, and thus provides a perspective for government to design optimal aggregate standard for carbon cap-and-trade. Results show a negative correlation between enterprises' carbon intensity and their equilibrium output in the product market, and indicate a threshold for the relative magnitude of the duopoly enterprises' carbon intensity, above which their absolute output will differ dramatically. The incorporation of carbon offsetting scheme into a non-offset quota trading scheme will reduce its equilibrium carbon price, thereby mitigate its negative impact on industry's total output in the product market by an either linear or quadratic form, depending on the design for the proportion ceiling of offsetting quota. (C) 2014 Elsevier Ltd. All rights reserved.

An analysis of company choice preference to carbon tax policy in China (2015) 🗎🗎

This paper summarizes an analysis of choice preferences of Chinese companies to the design options of carbon tax policy. The data were collected from 201 companies, with around half of them based in the western Shanxi Province and the other half from the eastern Jiangsu Province. Modeling analysis of the discrete choice dataset confirms the statistically significant relationships, between the company's preferences to carbon tax policy with the policy attributes, including tax rate, tax relief measures and the revenue utilization. From the viewpoint of Chinese businesses, the option of carbon tax policy with tax rate at 10-30 Yuan/t-CO2, allowing tax relief to energy-intensive sectors, using the revenues specific for climate change and starting as early as the 13th five-year plan period (2016-2020) would be preferable and realistic. The results of this research may be referred for the discussions and development of carbon tax policy in China. (C) 2014 Elsevier Ltd. All rights reserved.

Will export rebate policy be effective for CO2 emissions reduction in China? A CEEPA-based analysis (2015) 🗎🗎

China has adopted cancellation of export tax rebate policies on maily occasions to push ahead energy conservation and emission reduction since 2007. By applying a CEEPA (China Energy 8: Environmental Policy Analysis system) model, this paper simulates the impacts of the cancellation of export rebates on CO2 emissions and socio-economic consequences in different scenarios so as to figure out whether it works. This paper covers three export rebate scenarios and makes comparisons between the impacts of export rebates on emission reduction effects and that of carbon tax policies. The conclusions are: 1) the current policy which cancels export rebates for key sectors can cut emissions at huge economic cost, yet it is unustainable; 2) the policy which cancels export rebates for key sectors and meanwhile subsidizes sectoral outputs yields double dividends in the short term, thus can facilitate emission reduction yet the boost is limited; 3) the policy which cancels export rebates and boosts domestic demand helps improving residents' welfare in the short term while it may inflict pronounced social and economic impacts in the long run. So policy of this kind should be adopted with great caution; 4) export rebates generate far more economic costs than carbon tax policies in the long term, and don't contribute to optimizing the energy mix as well as the latter. In summary, canceling export rebates should not be regarded as a priority to encourage emission reduction. (C) 2014 Elsevier Ltd. All rights reserved.

An assessment of proposed energy resource tax reform in Russia: A static general equilibrium analysis (2015) 🗎🗎

A large part of government revenues in Russia comes from royalties and export taxes on crude oil, oil products, and gas. Recently, the Russian government has considered reducing export taxes on crude oil and oil products compensated by an increase in the royalty on crude oil. The objective of the paper is to analyse the economy-wide effects of this proposal. Moreover, a hypothetical replacement of export taxes and royalties with a pure rent tax is analysed. A static, single-country, multi-sector computable generation equilibrium (CGE) model is employed. The primary findings are as follows. A replacement of export taxes on crude oil and oil products with a royalty on crude oil provides substantial allocative efficiency gains, but this policy is not a superior one. Welfare could be substantially improved when the export taxes and royalty are replaced with a pure rent tax that can be implemented in the form of a cash-flow tax. On the negative side, reducing export taxes on crude oil and oil products results in a strong appreciation of the currency. As a result, domestic producers become less competitive in domestic markets, and there is a massive increase in import demand. (C) 2015 Elsevier B.V. All rights reserved.

Fossil fuel producing economies have greater potential for industrial interfuel substitution (2015) 🗎🗎

This study analyzes industrial interfuel substitution in an international context using a large unbalanced panel dataset of 63 countries. We find that compared to other countries fossil fuel producing economies have higher short-term interfuel substitution elasticities. This difference increases further in the long run as fossil fuel producing countries have a considerably longer adjustment of their fuel-using capital stock. These results imply lower economic cost for policies aimed at climate abatement and more efficient utilization of energy resources in energy-intensive economies. (C) 2014 Published by Elsevier B.V.

What drives the formation of global oil trade patterns? (2015) 🗎🗎

In this paper, the spatial characteristics of current global oil trade patterns are investigated by proposing a new indicator Moran-F. Meanwhile, the factors that influence the formation of oil trade patterns are identified by constructing four different kinds of spatial econometric models. The findings indicate that most oil exporters have an obvious export focus in North America and a relatively balanced export in Europe and the Asia-Pacific region. Besides supply and demand factors, technological progress and energy efficiency have also significantly influenced the oil trade. Moreover, there is a spillover effect of trade flow among different regions, but its impact is weak. In addition, oil importers in the same region have the potential to cooperate due to their similar import sources. Finally, promotion of oil importers' R&D investments can effectively reduce the demand for global oil trade. (C) 2015 Elsevier B.V. All rights reserved.

The impacts of climate change policies on the transportation sector (2015) 🗎🗎

This study examines the impact of carbon tax and its alternative, energy tax, on both the Malaysian economy and the transport sector, using a CGE (Computable General Equilibrium) framework. In order to achieve government revenue neutrality, two schemes for revenue recycling, namely lump-sum transfer and labour tax recycling, are employed. The simulation's results show that the carbon tax policy is more effective than the energy tax policy in reducing carbon emissions; because it is less expensive. The negative impact of the carbon tax, on real GDP (Gross Domestic Product) and investment, is less than the energy tax in both recycling schemes. Through lump-sum transfer, both taxes lead to an increase in the consumption and welfare of households, because the tax interaction effect is less than the tax recycling effect; however, through labour tax recycling, they decrease the consumption and welfare of all household groups. These tax policies are not beneficial for the transportation sector, because they lead to decreases in domestic output, domestic demand, exports and imports of all transport sectors. The climate change policies would lead to mitigation of rebound effect in whole of the economy and the transport sector. (C) 2015 Elsevier Ltd. All rights reserved.

A bumpy road to the top: Statistically defining a peak in oil production (2015) 🗎🗎

Twenty-four countries where oil production is in decline were identified. A simple metric of the volatility of oil production on the upslope of their production curves, called decline as a proportion of pre-peak production (or PPPmax), was created. PPPmax was determined for the post-peak countries and plotted as a frequency distribution. PPPmax varied from 0-56%, but was skewed toward the lower part of the range (median 6.24 As global production is determined by the total contribution of production from all countries, the variation in PPPmax will represent the lower and upper bound of the "bumpiness" of global oil production. It also enables a retrospective approximation of the when global oil production is most likely past its peak. (c) 2015 Elsevier Ltd. All rights reserved.

Changes in CO2 emissions over business cycle recessions and expansions in the United States: A decomposition analysis (2015) 🗎🗎

This paper examines the asymmetry of changes in CO2 emissions over business cycle recessions and expansions using yearly data from 1949 and monthly data from 1973 for the United States (US). In addition, decomposition analysis is applied to investigate the relative roles of various proximate contributing factors to observed changes in total and per capita CO2 emissions and emissions intensity, over business cycle phases. The results suggest, inter alia, that aggregate emissions and emissions intensity reduce much faster in contractions than they increase in expansions. In addition, unlike the three previous expansions, in the most recent post-GFC US expansion, emissions per capita have continued to decline, and at a rate very similar to the rate of reduction in preceding contractions. This suggests the real possibility that the most recent contraction may have had an ongoing impact on the path of per capita emissions well beyond the immediate impact experienced during the contraction itself. (C) 2015 Elsevier Ltd. All rights reserved.

Impact of fragmented emission reduction regimes on the energy market and on CO2 emissions related to land use: A case study with China and the European Union as first movers (2015) 🗎🗎

In recent years, an approach based on voluntary pledges by individual regions has attracted interest of policy-makers and consequently also climate policy research. In this paper, we analyze scenarios in which the EU and China act as early-movers in international climate policy. Such a situation risks leakage between regions with ambitious emission reduction targets and those with less ambitious targets via fossil-fuel markets, displacement of heavy industry and land-use consequences. We examine some of these factors using the IMAGE model. While IMAGE does not include all mechanisms, we find the leakage rate to be relatively small, about 5% of the emission reductions in the EU and China. The far majority occurs via the energy market channel and the remainder through land-use change. Reduced oil prices due to less depletion forms the key reason for this leakage impact. (C) 2014 Elsevier Inc. All rights reserved.

The Impact of a Carbon Tax on the Chilean Electricity Generation Sector (2015) 🗎🗎

This paper aims to analyse the economy-wide implications of a carbon tax applied on the Chilean electricity generation sector. In order to analyse the macroeconomic impacts, both an energy sectorial model and a Dynamic Stochastic General Equilibrium model have been used. During the year 2014 a carbon tax of 5 US$/tCO(2)e was approved in Chile. This tax and its increases (10, 20, 30, 40 and 50 US$/tCO(2)e) are evaluated in this article. The results show that the effectiveness of this policy depends on some variables which are not controlled by policy makers, for example, non-conventional renewable energy investment cost projections, natural gas prices, and the feasibility of exploiting hydroelectric resources. For a carbon tax of 20 US$/tCO(2)e, the average annual emission reduction would be between 1.1 and 9.1 million tCO(2)e. However, the price of the electricity would increase between 8.3 and 9.6 US$/MWh. This price shock would decrease the annual GDP growth rate by a maximum amount of 0.13%. This article compares this energy policy with others such as the introduction of non-conventional renewable energy sources and a sectorial cap. The results show that the same global greenhouse gas (GHG) emission reduction can be obtained with these policies, but the impact on the electricity price and GDP are lower than that of the carbon tax.

The Effect of Carbon Taxes on Agricultural Trade (2015) 🗎🗎

This study evaluates the implications of an existing carbon tax on international trade in the agricultural sector. Applying uniformly to all fossil fuels combusted within its borders, the province of British Columbia unilaterally introduced a carbon tax on July 1, 2008. In 2012, the province granted an exemption from the tax to certain agricultural sectors. Using commodity-specific trade flows and exploiting cross-provincial and intertemporal variation, we find little evidence that the carbon tax is associated with any meaningful effects on agricultural trade despite the sector being singled out as at risk by the provincial government. Our findings suggest that there is not compelling evidence to support exempting the agricultural sector from the tax. Discussion of potential policy remedies to address the tax's potential effects on firm profitability and international competitiveness is also included.

European Union emissions trading scheme impact on the Spanish electricity price during phase II and phase III implementation (2015) 🗎🗎

The European Union Emissions Trading Scheme (EU ETS) is a cornerstone of the European Union's policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost-effectively. The purpose of the present work is to evaluate the influence of CO2 opportunity cost on the Spanish wholesale electricity price. Our sample includes all Phase II of the EU ETS and the first year of Phase III implementation, from January 2008 to December 2013. A vector error correction model (VECM) is applied to estimate not only long-run equilibrium relations, but also short-run interactions between the electricity price and the fuel (natural gas and coal) and carbon prices. The four commodities prices are modeled as joint endogenous variables with air temperature and renewable energy as exogenous variables. We found a long-run relationship (cointegration) between electricity price, carbon price, and fuel prices. By estimating the dynamic pass-through of carbon price into electricity price for different periods of our sample, it is possible to observe the weakening of the link between carbon and electricity prices as a result from the collapse on CO2 prices, therefore compromising the efficacy of the system to reach proposed environmental goals. This conclusion is in line with the need to shape new policies within the framework of the EU ETS that prevent excessive low prices for carbon over extended periods of time. (C) 2015 Elsevier Ltd. All rights reserved.

The energy metabolism of China and India between 1971 and 2010: Studying the bifurcation (2015) 🗎🗎

This paper presents a comparison of the changes in the energetic metabolic pattern of China and India, the two most populated countries in the world, with two economies undergoing an important economic transition. The comparison of the changes in the energetic metabolic pattern has the scope to characterize and explain a bifurcation in their evolutionary path in the recent years, using the Multi-Scale Integrated Analysis of Societal and Ecosystem Metabolism (MuSIASEM) approach. The analysis shows an impressive transformation of China's energy metabolism determined by the joining of the WTO in 2001. Since then, China became the largest factory of the world with a generalized capitalization of all sectors, especially the industrial sector, boosting economic labor productivity as well as total energy consumption. India, on the contrary, lags behind when considering these factors. Looking at changes in the household sector (energy metabolism associated with final consumption) in the case of China, the energetic metabolic rate (EMR) soared in the last decade, also thanks to a reduced growth of population, whereas in India it remained stagnant for the last 40 years. This analysis indicates a big challenge for India for the next decade. In the light of the data analyzed both countries will continue to require strong injections of technical capital requiring a continuous increase in their total energy consumption. When considering the size of these economies it is easy to guess that this may induce a dramatic increase in the price of energy, an event that at the moment will penalize much more the chance of a quick economic development of India. (C) 2014 Elsevier Ltd. All rights reserved.

Buffer effect and price effect of a personal carbon trading scheme (2015) 🗎🗎

PCT (personal carbon trading) is a downstream cap-and-trade scheme used to reduce carbon emissions from the household sector. It is argued that the PCT scheme could provide a buffer between the energy price and the total energy price, and thus energy demand remains stable. However these effects have never been verified. To fill in this gap in the literature, a price effect analysis is conducted. Firstly, a GUO (general utility optimization) model is proposed to obtain the general formulae of the price effect, substitution effect and income effect under the PCT scheme. Secondly, a specific version of the GUO model, namely a Cobb Douglas utility function model, is employed to obtain the specific effect formulae to verify the buffer effect. Finally, a numerical example and a sensitive analysis are presented to demonstrate these effects. The results indicate that, under the PCT scheme, the total energy price and energy demand are less sensitive to the energy price changes. Thus, when energy prices fluctuate, the PCT scheme is capable of providing certainty in emissions reduction and is more effective than carbon taxes. On the basis of these results, implications of this research are discussed and suggestions for future research are provided. (C) 2015 Elsevier Ltd. All rights reserved.

Carbon prices and incentives for technological development (2015) 🗎🗎

There is concern that the carbon prices generated through climate policies are too low to create the incentives necessary to stimulate technological development. This paper empirically analyzes how the Swedish carbon dioxide (CO2) tax and the European Union emission trading system (EU ETS) have affected productivity development in the Swedish pulp and paper industry 1998-2008. A Luenberger total factor productivity (TFP) indicator is computed using data envelopment analysis. The results show that climate policy had a modest impact on technological development in the pulp and paper industry, and if significant it was negative. The price of fossil fuels, on the contrary, seems to have created important incentives for technological development. Hence, the results suggest that the carbon prices faced by the industry through EU ETS and the CO2 tax have been too low. Even though the data for this study is specific for Sweden, the models and results are applicable internationally. When designing policy to mitigate CO2 emissions, it is vital that the policy creates a carbon price that is high enough otherwise the pressure on technological development will not be sufficiently strong. (C) 2014 Elsevier Ltd. All rights reserved.

ENVIRONMENTAL POLICY FOR FISCAL REFORM: CAN A CARBON TAX PLAY A ROLE? (2015) 🗎🗎

This paper compares the effects of using revenues from a carbon tax to either reduce the national debt or reduce federal personal or corporate income tax rates. It differs from other analyses by looking at a carbon tax as a purely revenue raising measure, not as an optimal Pigouvian tax or as an instrument to achieve a predetermined reduction in emissions. Thus it addresses the question of whether a carbon tax would be part of an optimal tax policy even if there were no damages to the United States from CO2 emissions. We use a computable general equilibrium model (NERA's N(ew)ERA model) that consists of a top-down macro model of the U.S. economy and a detailed bottom-up model of the North American electricity sector: The N(ew)ERA model is an integrated energy and economic model that includes a detailed plant-level representation of the electricity sector with an aggregate level representation of the rest of the economy. The analysis shows that using revenues for either debt or tax rate reduction can reduce the welfare losses from a carbon tax; however, the savings from reducing either federal debt or the marginal rates of other distorting taxes are still less than the economic costs imposed by the narrowly based tax on CO2 emissions. The higher the carbon tax, the greater the disparity becomes.

The Economic impact of different carbon tax revenue recycling schemes in China: A model-based scenario analysis (2015) 🗎🗎

As an important policy instrument for climate mitigation, the carbon tax policy design and its consequent social-economic impact calls for more research. In this paper, a dynamic Computable General Equilibrium (CGE) model - CASIPM-GE model is applied to explore the impact of a carbon tax and different tax revenue recycling schemes on China's economy. Simulation results show that the carbon tax is effective to reduce carbon emissions with mild impact on China's macro economy. In particular, a production tax deduction can be used to recycle the carbon tax revenue if the government wants to reduce the cost of a carbon tax; however, a consumption tax deduction may help the economy to restructure and may benefit the long-run emissions reduction. In terms of industrial output, most industries are negatively affected; sectors with large share of exports are subjected to negative shocks if there is consumption tax deduction financed by the carbon tax revenue. The study suggests that carbon revenue recycling scheme is important in designing the carbon tax policy: a well-designed scheme can help reduce the cost of a carbon tax. (C) 2015 Elsevier Ltd. All rights reserved.

Ex-ante evaluation of EU ETS during 2013-2030: EU-internal abatement (2015) 🗎🗎

This study investigates CO2 emission reduction within the EU resulting from the Emissions Trading Scheme (ETS) up to 2030. This is performed by constructing a baseline scenario without the ETS and assessing the impacts of the ETS, as currently designed. The results indicate that the ETS will start to impact emissions primarily after 2025 due to the prevalence of a sizable allowance surplus. The impact of approved (i.e. back-loading and 2.2% linear reduction factor (LRF)) and proposed (i.e. market stability reserve (MSR)) policy interventions and the inclusion of aviation, could accelerate the exhaustion of surplus and increase emission reductions during the investigated period. However, these measures would be insufficient to restore the scarcity of allowances and the corresponding carbon price before the start of ETS Phase IV, and the effectiveness of EU-internal abatement cannot be guaranteed until 2023. The effectiveness could be further reduced in the case of the economic shocks or the exclusion of international aviation. To restore the scarcity of allowances, other reform options are necessary. This paper extends the reasoning for the early removal of the back-loaded 900 Mtonne allowances by 2020 and broadening the scope of ETS to other sectors with potential high demand for allowances. (C) 2014 Elsevier Ltd. All rights reserved.

Energy Demand and Trade in General Equilibrium (2015) 🗎🗎

This paper sheds light on the impact of alternative environmental policies on energy demand, global emissions, trade, and welfare. For this, we develop an Eaton-Kortum type general equilibrium model of international trade which includes an energy sector. We structurally estimate the key parameters of the model and calibrate it to the data on 31 OECD countries and the rest of the world in the year 2000. The model helps assessing the relative welfare effects under alternative environmental policies. We find that, when carbon spillover effects are absent, taxing energy resources as an input in energy production is preferable to taxing domestic energy production in terms of minimizing emissions. However, with negative externalities on foreign customers domestic energy output should be taxed to minimize world carbon emissions given a certain level of welfare change for all countries.

A critical examination of the consumption-based accounting approach: has the blaming of consumers gone too far? (2015) 🗎🗎

A series of studies has recently used emissions embodied in net imports (EENI) to argue for the consumption-based accounting (CBA) approach. These publications have been generating much attention from the media and academia for providing an opportunity to inform effective climate policy'. However, policymakers must be cautious when considering if CBA can be used to replace or just to supplement current practice of production-based accounting (PBA). Terms such as carbon leakage', emissions transfers', and CO2 outsourcing' have been uncritically overused as there is little evidence that EENI is the result of climate policy. Furthermore, CBA overlooks insourcing' of polluting industries by producing regions when blaming consumers for emissions. To avoid misinformation, EENI should be called just that. CBA's practicality is limited as it involves more data-intensive calculations and higher transaction costs than PBA. The success of CBA will rely on consumers to put pressure on producers. Eventually, it is still producers that need to reduce emissions. PBA is more practical by directly placing pressure on producers along with environmental laws and regulations. CBA will be counter-productive to global emissions control if producers increase emissions due to reduced responsibility over the emissions incurred by the production of their exports. However, CBA could be used to persuade consumers to choose low-emissions products, support producers' sustainability efforts, and reduce nonbasic consumption. (C) 2014 JohnWiley & Sons, Ltd.

CO2 emission mitigation and fossil fuel markets: Dynamic and international aspects of climate policies (2015) 🗎🗎

This paper explores a multi-model scenario ensemble to assess the impacts of idealized and non-idealized climate change stabilization policies on fossil fuel markets. Under idealized conditions climate policies significantly reduce coal use in the short- and long-term. Reductions in oil and gas use are much smaller, particularly until 2030, but revenues decrease much more because oil and gas prices are higher than coal prices. A first deviation from optimal transition pathways is delayed action that relaxes global emission targets until 2030 in accordance with the Copenhagen pledges. Fossil fuel markets revert back to the no-policy case: though coal use increases strongest, revenue gains are higher for oil and gas. To balance the carbon budget over the 21st century, the long-term reallocation of fossil fuels is significantly larger twice and more than the short-term distortion. This amplifying effect results from coal lock-in and inter-fuel substitution effects to balance the full-century carbon budget. The second deviation from the optimal transition pathway relaxes the global participation assumption. The result here is less clear-cut across models, as we find carbon leakage effects ranging from positive to negative because trade and substitution patterns of coal, oil, and gas differ across models. In summary, distortions of fossil fuel markets resulting from relaxed short-term global emission targets are more important and less uncertain than the issue of carbon leakage from early mover action. (C) 2014 The Authors. Published by Elsevier B.V.

Evaluation of a consumer incentive program for an energy-efficient product in South Korea (2015) 🗎🗎

Because green products are expected to reduce environmental pollution, save natural resources, and protect public health, they are regarded as a useful instrument of sustainable economic growth. Although many policies exist to promote the purchase of green products, their successful adoption requires the voluntary participation of individual consumers and the implementation of an appropriate incentive system. This study presents an ex ante evaluation of consumer preferences when faced with an incentive program that aims to promote the purchase of green products, specifically an energy-efficient LCD television. By using a conjoint analysis with a mixed logit model, we explore the effects of the incentive program on electric power consumption and the consequential reduction in greenhouse gas emissions in South Korea. Our simulation results suggest that when a consumer receives both 5 % of the purchase price of the green product in the form of "incentive points" and a one-million Korean won income tax deduction, the electric power consumption of LCD televisions nationwide will reduce by 50 GWh, thus reducing overall CO2 emissions by 21,200 t.

The Price and Welfare Effects of Biofuel Mandates and Subsidies (2015) 🗎🗎

The coordination of agricultural, environmental and energy policies requires a thorough understanding of the interactions between crop, food and energy markets. This paper develops a general equilibrium model to analyze the interactions and to evaluate the price and welfare effect of biofuel mandates and subsidies. Results suggest that biofuel mandates are a primary cause of some of the major concerns associated with crop-based biofuel production, including higher food prices and lower consumer welfare. The price and welfare effects of biofuel subsidies depend on the level of the biofuel mandate. When the mandate is weak or not binding, a biofuel subsidy becomes a transfer from consumers to biofuel producers, which tends to reduce food and fuel prices because of the negative income effect. However, with a strong mandate, a biofuel subsidy will increase the prices of crops, food, and fuel when crops account for a large share of production cost and when the supply of crops is inelastic. Using parameter values consistent with empirical evidence found in the U.S., we calculated the price and welfare effects of the biofuel mandates and subsidies specified in the Energy Independence and Security Act of 2007. Results suggest that the biofuel mandates and subsidies increased the price of corn by 25-40 %, increased the price of food by 1.5-2.5 %, and lowered the price of gasoline by 5-10 %. Overall, the biofuel policies had only a small effect on consumer utility.

Energy trade efficiency and its determinants: A Malmquist index approach (2015) 🗎🗎

This paper adopts the Malmquist index approach to investigate multi-product energy trade efficiency and its determinants from an empirical perspective. Using trade statistics of coal, oil and gas of 40 countries over the period of 1995 to 2008, we found that the efficiency of bilateral energy trade ranged between 0.26 and 035 when imperfect substitution between different energy products is taken into account This measure is significantly lower than those obtained from traditional gravity models. It suggests that the ability of cross-product substitution affects trade efficiency improvement which results from regional market integration and related trade policy. The results provide useful insights on predicting the pattern of future energy trade and hence have important implications for relevant countries to prioritize product-specific trade policies. (C) 2015 Elsevier B.V. All rights reserved.

IMPACT OF ENVIRONMENTAL TAXES ON SUSTAINABLE ENERGY DEVELOPMENT IN BALTIC STATES, CZECH REPUBLIC AND SLOVAKIA (2015) 🗎🗎

Environmental taxes have direct impact on sustainable energy development as energy production and consumption is the major source of GHG and classical pollutants emissions. There are number of EU member states which are using environmental pollution taxes as the main economic instrument of atmospheric air pollution reduction. The energy sector is the main source of atmospheric pollution therefore environmental taxes should have direct impact on sustainable energy development as these taxes create incentives to reduce consumption of fossil fuels and to switch to renewables and cleaner fossil fuels such as natural gas. The comparative study of environmental taxes and indicators of sustainable energy sector development in Baltics and Czech Republic and Slovakia was performed to assess what role environmental taxes are playing in achieving sustainable energy development in selected new EU member states. Analysis of environmental taxes in three Baltic States and Czech Republic indicated quite different energy and pollution tax rates as well as quite large differences in the share of environmental tax revenues as percentages of GDP in these countries. Estonia distinguishes with the best results in greening environmental tax system and one of the best results in achieving sustainable energy development targets. Latvia has one of the lowest share of environmental taxes as percentage of GDP and has very high shares of renewables in electricity generation and in final energy consumption however it is more related with favourable climate conditions and well developed hydro power plants.

Asymmetric industrial energy prices and international trade (2015) 🗎🗎

This paper measures the response of bilateral trade flows to differences in industrial energy prices across countries. Using a rich panel dataset with 42 countries, 62 manufacturing sectors over 16 years (1996-2011) and covering 60% of global merchandise trade, we estimate the short-run effects of sector-level energy price asymmetry on trade. We find that changes in relative energy prices have a statistically significant but very small impact on imports. On average, a 10% increase in the energy price difference between two country-sectors increases imports by 0.2%. The impact is larger for energy-intensive sectors. Even in these sectors, however, the magnitude of the effect is such that changes in energy price differences across time explain less than 0.01% of the variation in trade flows. Simulations based on our model predict that a (sin)40-65/tCO(2) price of carbon in the EU ETS would increase Europe's imports from the rest of the world by less than 0.05% and decrease exports by 02%. (c) 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license

Low carbon maritime transport: How speed, size and slenderness amounts to substantial capital energy substitution (2015) 🗎🗎

Three responses that reduce energy consumption and CO2 emissions in maritime transport are slower speeds, larger vessels and slender hull designs. We use crude oil carriers as our illustrative example; these represent nearly a quarter of international sea cargo movements. We estimate the potential and costs in these which can all be described as capital substituting for energy and emissions. At different degrees of flexibility and time scales: speed reductions are feasible immediately when there are vessels available, though more capital will be tied up in cargo. Deployment of larger and more slender vessels to a greater extent requires fleet renovation, and also investments in ports and infrastructure. A novel finding in our analysis is that if bunker costs rise as a result of emission costs (fees, quotas), then this may depress speeds and emissions more than if they result from higher oil prices. The reason is that for higher oil prices, more capital tied up in cargo may give cargo owners an interest in speeding up, partly counteracting the impulse from fuel costs that tends to slow vessels down. Emission costs, in contrast, do not raise cargo values. (C) 2015 The Authors. Published by Elsevier Ltd.

British Columbia's revenue-neutral carbon tax: A review of the latest "grand experiment" in environmental policy (2015) 🗎🗎

In 2008, British Columbia implemented the first comprehensive and substantial carbon tax in North America. By 2012, the tax had reached a level of C$30/t CO2, and it covers about three-quarters of all greenhouse gas emissions in the province. This paper reviews existing evidence on the effect of the tax on greenhouse emissions, the economy, and the distribution of income, and provides new evidence on public perceptions of the tax. Empirical and simulation models suggest that the tax has reduced emissions in the province by between 5% and 15% since being implemented. At the same time, models show that the tax has had negligible effects on the aggregate economy, despite some evidence that certain emissions-intensive sectors face challenges. Studies differ on the effects of the policy on the distribution of income, however all studies agree that the effects are relatively small in this dimension. Finally, polling data shows that the tax was initially opposed by the majority of the public, but that three years post-implementation, the public generally supported the carbon tax. (C) 2015 Elsevier Ltd. All rights reserved.

The economic power of energy and the need to integrate it with energy policy (2015) 🗎🗎

Drastic oil price changes, the associated economic perturbations, the coupling of energy conversion to entropy production in the form of emissions, and the problems of climate change call for a reappraisal of energy in economic theory. We review econometric growth analyses that do not weigh the production factors capital, labor, and energy by their cost shares. Their reproduction of economic growth in Germany, Japan, and the USA during the second half of 20th century is good. According to these analyses, energy's output elasticity, which measures its economic power, is much larger than energy's share in total factor cost, while for labor's output elasticity and cost share the opposite is true. This is consistent with profit and welfare optimization, if hitherto ignored technological constraints are taken into account. Computing the motion of the German industrial sector in its cost mountain, employing empirical data on factor quantities and prices, supports these results. The pivotal role of energy in economic growth provides leverage to energy policies that care about social well being and climate stability. (C) 2015 Elsevier Ltd. All rights reserved.

The impact of China's carbon allowance allocation rules on the product prices and emission reduction behaviors of ETS-covered enterprises (2015) 🗎🗎

It is an important task for China to allocate carbon emission allowance to realize its carbon reduction target and establish carbon trading market. China has designed several allocation rules within seven pilot regions. What influence those rules may cause is closely related with the enthusiasm of emission trading scheme (ETS) covered enterprises' participation in carbon market, and more importantly, with the mechanism design and sustainable development of carbon market. For this purpose, the multi-stage profit model is developed to analyze the ETS-covered enterprises' product prices and emission reduction behaviors under different allocation rules. The results show that, first, under the rules of grandfathering, self-declaration and auctioning, when deciding the optimal product price and optimal carbon emission reduction, those enterprises may focus on maximizing current stage profit; however, under the rule of benchmarking, those enterprises may care more about the impact of current decisions on the profit in next stage. Second, the optimal product price policy is positively correlated with the price of the same kind products, consumers' low-carbon awareness and government subsidy. Finally, along with the increase of carbon price, consumers' low-carbon awareness and government subsidy and the decrease of carbon emission cap, those enterprises tend to reduce carbon emissions. (c) 2015 Elsevier Ltd. All rights reserved.

Carbon emission, energy consumption and intermediate goods trade: A regional study of East Asia (2015) 🗎🗎

Using country level panel data from East Asia over the period 1998-2011, this paper examines the implications of international production fragmentation-induced intermediate goods trade on the link between energy consumption and carbon pollution. The paper focuses on the interaction effect between energy consumption and trade in intermediate goods on carbon emission. The empirical results presented suggest that international trade in intermediate goods decreases the positive impact on carbon emission of energy consumption. When compared with the trade in final goods, intermediate goods trade contributes to a greater decrease in carbon pollution resulting from energy consumption. These results confirm that the link between energy consumption and carbon pollution in East Asia is significantly affected by international production fragmentation-induced trade in intermediate goods. The results presented in this paper have some important policy implications. (c) 2015 Elsevier Ltd. All rights reserved.

Carbon dioxide emission standards for US power plants: An efficiency analysis perspective (2015) 🗎🗎

On June 25, 2013, President Obama announced his plan to introduce carbon dioxide emission standards for electricity generation. This paper proposes an efficiency analysis approach that addresses which emission rates (and standards) would be feasible if the existing generating units adopt best practices. A new efficiency measure is introduced and further decomposed to identify different sources' contributions to emission rate improvements. Estimating two Data Envelopment Analysis (DEA) models - the well-known joint production model and the new materials balance model - on a dataset consisting of 160 bituminous-fired generating units, we find that the average generating unit's electricity-to-carbon dioxide ratio is 15.3% below the corresponding best-practice ratio. Further examinations reveal that this discrepancy can largely be attributed to non-discretionary factors and not to managerial inefficiency. Moreover, even if the best practice ratios could be implemented, the generating units would not be able to comply with the EPA's recently proposed carbon dioxide standard. (C) 2015 Elsevier B.V. All rights reserved.

Carbon dioxide emissions embodied in international trade in Central Europe between 1995 and 2008 (2015) 🗎🗎

Climate change and environmental policies are widely discussed, but much less is known about emissions embodied in goods traded internationally, and the distinction between emission producers and consumers. The carbon dioxide emissions embodied in international trade in Central European countries are subject to examination in this paper. As a result of industrial restructuring and environmental legislation, air pollution has improved significantly in Central European countries since the 1989 transition. On the other hand, economic growth has been accompanied by a rise in consumerism. Despite the increasing role of exports, the Visegrad group countries have become net importers of carbon dioxide emissions between 1995 and 2008. This seems to be the 'standard trajectory' of a country's transition toward a more developed and consumption-oriented economy. The global patterns of carbon dioxide emissions embodied in manufacturing exports are also mapped, using network analysis and constructing 'product space'. The analysis confirms that industrial re-structuring played an important role in lowering the production of carbon dioxide emissions in the Visegrad countries.

Solar energy embodied in international trade of goods and services: A multi-regional input-output approach (2015) 🗎🗎

In a globalized market, part of the goods/services consumed in a country might be produced abroad using diverse energy sources. To properly assess the extent to which a country is moving towards more sustainable energy sources, it is imperative to consider both, the amount of renewable energy produced within its boundaries along with that embodied in the imported goods/services. This work quantifies the amount of solar energy embodied in trade using environmentally extended input output models. Numerical results reveal that some countries are net importers of solar energy (the amount of solar energy consumed anywhere in the world for producing the goods and services they require is greater than the amount of solar energy they generate locally), while others are net exporters (the opposite situation occurs). Additionally, it was found that the production of solar energy in the top economies has increased in the last two decades. Our analysis aims to facilitate the design of more effective environmental policies for promoting the use of solar energy worldwide. (C) 2015 Elsevier Ltd. All rights reserved.

Comparing World Economic and Net Energy Metrics, Part 3: Macroeconomic Historical and Future Perspectives (2015) 🗎🗎

I use energy cost share to characterize the role of energy in the economy. Specifically, I use an estimate of monetary expenditures for primary energy on an annualized basis for forty-four countries from 1978 to 2010 for natural gas, coal, petroleum, and electricity. I show that global energy cost share is significantly correlated to a one-year lag in the change in gross domestic product as well as measures of total factor productivity. Given the historical reduction in the relative cost of energy (including food and fodder for animate power) since the start of the Industrial Revolution, combined with a global energy cost share estimate, I conclude that the turn of the 21st Century represents the time period with the cheapest energy in the history of human civilization (to date). This potential historical nadir for energy expenditures around 2000 has important ramifications for strategies to solve future social, economic, and environmental problems such as reducing annual emissions of greenhouse gases (GHGs). Rapidly decreasing annual GHG emissions while internalizing their costs into the economy might feedback to increase energy expenditures to such a degree as to prevent economic growth during that transition.

US oil dependence 2014: Is energy independence in sight? (2015) 🗎🗎

The importance of reducing U.S. oil dependence may have changed in light of developments in the world oil market over the past two decades. Since 2005, increased domestic production and decreased oil use have cut U.S. import dependence in half. The direct costs of oil dependence to the U.S. economy are estimated under four U.S. Energy Information Administration Scenarios to 2040. The key premises of the analysis are that the primary oil market failure is the use of market power by OPEC and that U.S. economic vulnerability is a result of the quantity of oil consumed, the lack of readily available, economical substitutes and the quantity of oil imported. Monte Carlo simulations of future oil market conditions indicate that the costs of U.S. oil dependence are likely to increase in constant dollars but decrease relative to U.S. gross domestic product unless oil resources are larger than estimated by the U.S. Energy Information Administration. Reducing oil dependence therefore remains a valuable goal for U.S. energy policy and an important co-benefit of mitigating greenhouse gas emissions. (C) 2015 Elsevier Ltd. All rights reserved.

The oil endgame: Strategies of oil exporters in a carbon-constrained world (2015) 🗎🗎

There is mounting evidence that global oil demand will peak between 2020 and 2040, supported by rational economics (inter-fuel competition and efficiency gains) and environmental policies. The perspective of a peak in world oil demand poses a serious economic threat to petrostates whose GDP largely depends on oil export revenues. This article develops a repertoire of five possible strategies that oil-exporting countries can follow in a carbon-constrained world: quota agreements, price wars, efficiency, compensation, and economic diversification. The analysis suggests that the strategic behavior of oil exporters could yield important effects on climate policies, oil prices and related rents, the energy security of importers, and global geopolitics. The findings suggest that models of decarbonization and global energy security need to incorporate more explicitly the strategic behavior of oil exporters. (C) 2015 Elsevier Ltd. All rights reserved.

Linking national food production to global supply chain impacts for the energy-climate challenge: the cases of the EU-27 and Turkey (2015) 🗎🗎

Although the food industry has a significant impact on the European economy and society, its contribution to energy consumption and global climate challenge is also considerably high compared to other manufacturing industries. However, the global energy and carbon impacts of European food production are not addressed sufficiently. With this motivation, this research aims to advance the body of knowledge on carbon and energy footprint analysis of food industries in the 27 member states of the European Union and Turkey. We employed a time series multi-region input output analysis to analyze the carbon and energy footprints of food manufacturing industries. As a global multi-region input output database, this research used the World Input Output Database, which provides a time-series of world input output tables for 40 countries worldwide covering 1440 economic sectors. The results from this study indicate that Germany, France and Spain have the largest food production-related energy footprint. All European countries have upstream suppliers as the dominant contributors of their total energy consumption, except for Romania, for which onsite impacts are dominant. Furthermore, the largest share of carbon emissions related to Turkish food manufacturing is found in Turkey's geographical boundary, whereas more than 50% of the total energy footprint of Turkey's food manufacturing industry is located in various regions outside of Turkey, including the rest of the world and particularly United States and the European Union. The findings show that upstream supply chains are responsible for over 90% of carbon emissions, while direct emissions and those from the first three-layers of food manufacturing supply chains are found to be responsible for approximately 80% of total carbon emissions. (C) 2015 Elsevier Ltd. All rights reserved.

Efficiency of Environmental Policy: Empirical Evidence Based on the Application of VEC Model (2016) 🗎🗎

This paper considers the relationship between CO2 as the main variable of climate change and the environmental policy instruments covering environmental taxes and government spending on environmental protection. The effects of the gross domestic product, carbon price, final energy consumption and quality of air were considered using the Vector Error Correction Model. The analysis is based on the survey of environmental policy instruments in the Czech Republic using time series data over the period 1996-2012. The data are extracted from the Eurostat database. The performed research identified negative relationships between CO2 and government spending on environmental protection and between CO2 and carbon price. Furthermore, the research revealed that the government spending on environmental protection and the carbon price have a more significant effect on CO2 than environmental taxes in the Czech Republic. This implies that environmental taxation is mainly used as a source for raising budget revenues in the Czech Republic without any effect on the level of consumption of goods producing CO2 emissions. Therefore, we conclud that currently imposed environmental taxation is inefficient.

Implicit CO2 prices of fossil fuel use in Switzerland (2016) 🗎🗎

This study aims to assess the efficiency of the fossil fuel taxation scheme currently in effect in Switzerland. To this end, the concept of implicit CO2 prices is introduced, based on which prices for different fossil fuel uses are derived. Implicit CO2 prices are defined as the difference between actual prices paid by consumers and efficient domestic fuel prices. Efficient domestic fuel prices, in turn, consist of private production costs, a uniform value added tax and only local external costs, not including external costs due to CO2 emissions and global climate change. The resulting prices differ substantially, which suggests that there is considerable cost-saving potential in reducing CO2 emissions in Switzerland. For passenger cars and air traffic, the implicit prices are negative. For these uses, higher fuel charges would therefore be beneficial from a purely domestic perspective, i.e., without considering the negative repercussions of global warming. (C) 2016 Elsevier Ltd. All rights reserved.

Impact of Carbon Quota Allocation Mechanism on Emissions Trading: An Agent-Based Simulation (2016) 🗎🗎

This paper establishes an agent-based simulation system of the carbon emissions trading in accordance with the complex feature of the trading process. This system analyzes the impact of the carbon quota allocation mechanism on emissions trading for three different aspects including the amount of emissions reduction, the economic effect on the emitters, and the emissions reduction cost. Based on the data of the carbon emissions of different industries in China, several simulations were made. The results indicate that the emissions trading policy can effectively reduce carbon emissions in a perfectly competitive market. Moreover, by comparing separate quota allocation mechanisms, we obtain the result that the scheme with a small extent quota decrease in a comprehensive allocation mechanism can minimize the unit carbon emission cost. Implementing this scheme can also achieve minimal effects of carbon emissions limitation on the economy on the basis that the environment is not destroyed. However, excessive quota decrease cannot promote the emitters to reduce emission. Taking into account that several developing countries have the dual task of limiting carbon emissions and developing the economy, it is necessary to adopt a comprehensive allocation mechanism of the carbon quota and increase the initial proportion of free allocation.

Emissions trading and abatement cost savings: An estimation of China's thermal power industry (2016) 🗎🗎

This study evaluates the efficiency advantage of a market-based emission permit trading policy instrument over a command and control policy instrument in the case of China's thermal power industry. We estimate the unrealized gains achievable through emission permit trading with an optimization frontier analysis. These unrealized gains include potential recoveries of electricity generation through eliminating spatial and temporal regulatory rigidity on emission permit trading. The results of an ex post estimation during 2006 and 2010 indicate a potential gain of 8.48% increase in electricity generation if both the intra- and inter-period regulatory rigidities on CO2 emission permits trading had been eliminated. In addition, if the permit trading systems for three air pollutions, CO2, SO2, and NOx, had been completely integrated, a positive net synergy effect of 1.43% increase in electricity generation could have been secured. The unrealized gains identified in this study provide supports for establishing a nationwide emission permit trading system in China. (C) 2016 Elsevier Ltd. All rights reserved.

Have US power plants become less technically efficient? The impact of carbon emission regulation (2016) 🗎🗎

We estimate directional distance functions to measure the impact of carbon emission regulation, the Regional Greenhouse Gas Initiative (RGGI) in particular, on U.S. power plants' technical efficiency. The model shows that the average technical efficiency scores for coal and natural gas plants are 88.70% and 83.14% respectively, indicating a very technically efficient industry. We find no evidence of technical efficiency changes due to the RGGI regime in the RGGI area. In the same area, relatively less efficient coal plants exited the market and slightly more efficient natural gas plants entered, compared to the incumbent plants. In addition, some evidence of a spillover effect is found. Using a counterfactual analysis, the RGGI regulation leads to a 1.48% decline in the average technical efficiency for coal plants within neighboring states of RGGI during 2009-2013. (C) Published by Elsevier B.V.

A new consumption-based accounting model for greenhouse gases from 1948 to 2012 (2016) 🗎🗎

Greenhouse gas emissions embodied in international trade have grown rapidly as globalization has progressed. and potentially threaten the efficacy of unilateral climate treaties such as the Kyoto Protocol. Consumption-based methods have been put forward as a way of overcoming this issue and help design future climate policies. We improve the Long-term Consumption-based Accounting (LCBA) model, with transfer carbon data from 1948 to 2012 by introduting country-specific import intensities and detailed bilateral trade data from UNcomtrade. Comparisons of our new "LCBA2" model with existing 4 studies show similar consumption based emission patterns both in trend and magnitude, and significant emission changes in many European countries. The results independently confirm previous findings on the efficacy of the Kyoto Protocol. The results indicate transferred emissions have contributed an historic 36 Gt CO2 of cumulative emissions, have grown rapidly during the past 30 years (up to 8% of total emissions) and are likely to become increasingly influential in the near future as the global economy recovers. We also use the improved model to study other gases (CH4, N2O and SO2) embodied in trade, and results indicate similar transfer patterns as CO2 with comparable or even moderately larger magnitudes. Across-method result differences between LCBA2 with 3 other models are analyzed based on using common input datasets. Large emitters show moderate biases (within 10%) and about 75% of countries have differences within 25%, independent of input dataset. The LCBA2 model provides useful estimates of transferred emissions in both across-country and long-term historical contexts. (C) 2016 Elsevier Ltd. All rights reserved.

Economics of modern energy boomtowns: Do oil and gas shocks differ from shocks in the rest of the economy? (2016) 🗎🗎

The US shale boom has intensified interest in how the expanding oil and gas sector affects local economic performance. Research has produced mixed results and has not compared how energy shocks differ from equal-sized shocks elsewhere in the economy. What emerges is that the estimated impacts of energy development vary by region, empirical methodology, as well as the time horizon that is considered. This paper captures these dimensions to present a more complete picture of energy boomtowns. Utilizing US county data, we estimate the effects of changes in oil and gas extraction employment on total employment growth as well as growth by sector. We compare this to the effects of equal-sized shocks in the rest of the economy to assess whether energy booms are inherently different. The analysis is performed separately for nonmetropolitan and metropolitan counties using instrumental variables. We difference over 1-, 3-, 6-, and 10-year time periods to account for county fixed effects and to assess responses across different time horizons. The results show that in nonmetro counties, energy sector multiplier effects on total county employment first increase up to 6-year horizons and then decline for 10-year horizons. We also observe positive spillovers to the non-traded goods sector, while spillovers are small or negative for traded goods. In metro counties, there are no significant effects on total employment, although positive spillovers are present in some sectors. Yet, equal-sized shocks in the rest of the economy produce more jobs on average than oil and gas shocks, suggesting that policymakers should seek more diversified development. (C) 2016 Elsevier B.V. All rights reserved.

Economics of US natural gas exports: Should regulators limit US LNG exports? (2016) 🗎🗎

This study assesses the level and destination of U.S. LNG exports, using a global natural market model under a wide range of EMF 31 scenarios. The scenarios reflect different U.S. natural gas resource outlooks, market conditions, changing U.S. environmental regulations, and possible changes in geopolitical conditions that affect the global natural gas demand and supply. U.S. LNG exports respond to market conditions under each scenario and are free from any artificial limits. In the near-term, U.S. LNG exports are uncompetitive in the Reference case and in the long-run U.S. LNG exports are significant when U.S. natural gas resources are plentiful. However under demand shocks (increase demand in Asia) or supply shocks (reduction in Russian supplies) or persistence of oil-indexed pricing cases, U.S. LNG exports become competitive to varying degrees. U.S. exports depend not only on U.S. economics but also on how U.S. prices change relative to price changes in other regions of the world. We conclude that limiting U.S. LNG exports is inconsistent with simulated uncertainties, and it should be left to the market to determine the levels and destination of exports. (C) 2016 Elsevier B.V. All rights reserved.

The geopolitical impact of the shale revolution: Exploring consequences on energy prices and rentier states (2016) 🗎🗎

While the shale revolution was largely a US' affair, it affects the global energy system. In this paper, we look at the effects of this spectacular increase in natural gas, and oil, extraction capacity can have on the mix of primary energy sources, on energy prices, and through that on internal political stability of rentier states. We use two exploratory simulation models to investigate the consequences of the combination of both complexity and uncertainty in relation to the global energy system and state stability. Our simulations show that shale developments could be seen as part of a long term hog-cycle, with a short term drop in oil prices if unconventional supply substitutes demand for oil. These lower oil prices may lead to instability in rentier states neighbouring the EU, especially when dependence on oil and gas income is high, youth bulges are present, or buffers like sovereign wealth funds are too limited to bridge the negative economic effects of temporary low oil prices. (C) 2016 Elsevier Ltd. All rights reserved.

Approaches to carbon allowance allocation in China: a computable general equilibrium analysis (2016) 🗎🗎

China is preparing to develop and implement an emissions trading system in its 13th five-year plan. Allowance allocation is one of the key issues to settle during the establishment of this system. This study applies the China Energy and Environmental Policy Analysis model to assess how the allowances should be allocated. Simulation results show that, while impacts on China's economic development vary according to how allowances are allocated, the negative impacts cannot be mitigated completely, which are between -0.5 and -0.1 % when 5 % of carbon emissions are reduced. In terms of the impacts on the macroeconomy, sectoral output, and capital revenue, results suggest that auctioning the allowances and recycling the revenue to reduce the indirect tax will perform best in alleviating the negative impacts. Meanwhile, impacts of carbon mitigation on international competitiveness can be reduced most in the approach where only key energy- and trade-intensive sectors are able to receive free allowances. However, if citizens' welfare and quality of life is prioritized, auctioning the allowance and transferring the revenue to households in proportion to their occupation will be the most effective approach; in this case, the negative impacts on rural households' disposable incomes and welfare will be reduced, and the income gap between rural and urban households will be narrowed.

Actuarial model and its application for implicit pension debt in China (2016) 🗎🗎

Whether the pension system transition is successful is closely related to the accurately accounted IPD amount and rationally solved scheme. China faces the problem of IPD with no exception. This paper uses individual cost method theory, combining Chinese pension system and its operation, builds up the implicit pension debt calculation model, then it measures the Chinese IPD quantity by statistical data. The paper finds out that the average IPD per-year is 39.404 billion Yuan in 2013-2050, the maximum is 185.053 in 2022, the minimum is 0.150 in 2050, and the accumulative IPD will sustain growth with annual growth rate of 7.06% in 2013-2050, from 119.787 billion Yuan to 1497.337 billion Yuan. Finally, this paper proposes the government to raise the legal retirement age, reduce the pension substitution rate, expand the coverage of endowment insurance, improve the investment yield of the pension fund, and so on, to compensate the IPD in China. (C) 2015 Elsevier Ltd. All rights reserved.

The distributional and nutritional impacts and mitigation potential of emission-based food taxes in the UK (2016) 🗎🗎

Agriculture and food production are responsible for a substantial proportion of greenhouse gas emissions. An emission based food tax has been proposed as one option to reduce food related emissions. This study introduces a method to measure the impacts of emission based food taxes at a household level which involves the use of data augmentation to account for the fact that the data record purchases and not consumption. The method is applied to determine the distributional and nutritional impacts of an emission based food tax across socio-economic classes in the UK. We find that a tax of A 2.841 pound/tCO2e on all foods would reduce food related emissions by 6.3 % and a tax on foods with above average levels of emissions would reduce emissions by 4.3 %. The tax burden falls disproportionately on households in the lowest socio-economic class because they tend to spend a larger proportion of their food expenditure on emission intensive foods and because they buy cheaper products and therefore experience relatively larger price increases.

Implications of a US electricity standard for final energy demand (2016) 🗎🗎

This paper analyzes the emissions impact of an emissions intensity standard (metric tons of CO2 per MWh of electricity) for the US power sector on US final energy demand - i.e. the manufacturing, residential, commercial, and transportation sectors. An emissions intensity standard, although geared towards the power sector, will have implications for these other sectors of the economy through its effect on economy-wide energy prices. Using a hybrid energy-economy simulation model (CIMS), we find the effect on aggregate emissions from final demand to mostly be small. However, after disaggregating final demand, we find significant changes in CO(2)e emissions for several of sub-sectors. Given that emissions reductions in final energy demand are needed alongside power sector reductions for the US to achieve deep emissions cuts, our findings provide needed insight as to whether these eventual reductions will be helped or hindered by a US electricity standard. (C) 2016 Elsevier B.V. All rights reserved.

A sequential input-output framework to analyze the economic and environmental implications of energy policies: Gas taxes and fuel subsidies (2016) 🗎🗎

A novel generic sequential input-output framework is developed to model the economy-wide changes in resource consumption and environmental emissions as a result of combined applied energy policies, e.g. taxes for non-renewables and subsidies for renewables. Many input-output analyses are based on a single period analysis. However, in the case of analyzing the effects of multiple policy interventions over time, the input-output table reflecting the state of the economy before the energy policy was introduced cannot be used for analyzing the economic effects of another policy intervention in the next time period since the monetary and physical transaction of commodities have already been affected. To show the efficacy of the proposed method, a case study is developed that introduced a gasoline tax and earmarks the revenues to subsidize biofuel production in the subsequent time period in the United States. In order to assess the change of environmental indicators after sequential policy interventions, Ecologically-based Life Cycle Analysis (ECO-LCA) inventories which include data on resource consumption, emissions, ecosystem goods and services related to the U.S. economic sectors are adopted. The environmentally extended input-output framework is ideally suited to model the interlinkages between a range for environmental indicators and detailed structural economic information at the sector level for the analysis of energy policies. The proposed framework can be utilized as a tool for leveraging the energy and environmental policy trade-off decisions which consider the impacts to resource consumption and environmental emissions. Our results show that, if a share of the gasoline tax revenue is reinvested to subsidize biofuel production, economy wide resource consumptions and emissions from the fossil fuel related supply chains will decrease. However, ecosystem goods and services such as soil erosion, water consumption for agricultural and livestock, cropland, nitrogen deposition along with the emissions such as nitrous oxide and ammonia will increase in short term as a consequence of the price drop and the increased demand for biofuels. This emphasizes the importance of focusing on a wide range of environmental outcomes and unintended side effects when introducing a specific environmental policy. (C) 2016 Elsevier Ltd. All rights reserved.

The distributional effects of emissions taxation in Brazil and their implications for climate policy (2016) 🗎🗎

The emission of greenhouse gases (GHG) generated by human activity is a major cause of global warming and climate change. There is considerable debate about the choice of the best mechanism to reduce emissions under a climate policy. The aim of this paper is to measure the impact of a policy of taxing GHG emissions on the Brazilian economy as a whole and on different household groups based on income levels in 2009. The following databases were used: Supply and Use Tables, Household Budget Survey, National Household Sample Survey and emissions data from the Brazilian Ministry of Science and Technology and Innovation. A price system from a national input output model that incorporates the intensity of GHG emissions is used, as well as a consumption vector broken down into ten representative households with different income levels. The main results indicate that this taxation system was slightly regressive and had a small negative impact on output. There were, however, significant emissions reductions. (C) 2016 Elsevier B.V. All rights reserved.

Energy expenditure, economic growth, and the minimum EROI of society (2016) 🗎🗎

We estimate energy expenditure for the US and world economies from 1850 to 2012. Periods of high energy expenditure relative to GDP (from 1850 to 1945), or spikes (1973-74 and 1978-79) are associated with low economic growth rates, and periods of low or falling energy expenditure are associated with high and rising economic growth rates (e.g. 1945-1973). Over the period 1960-2010 for which we have continuous year-to-year data for control variables (capital formation, population, and unemployment rate) we estimate that, statistically, in order to enjoy positive growth, the US economy cannot afford to spend more than 11% of its GDP on energy. Given the current energy intensity of the US economy, this translates in a minimum societal EROI of approximately 11:1 (or a maximum tolerable average price of energy of twice the current level). Granger tests consistently reveal a one way causality running from the level of energy expenditure (as a fraction of GDP) to economic growth in the US between 1960 and 2010. A coherent economic policy should be founded on improving net energy efficiency. This would yield a "double dividend": increased societal EROI (through decreased energy intensity of capital investment), and decreased sensitivity to energy price volatility. (C) 2016 Elsevier Ltd. All rights reserved.

Towards a low carbon growth in Mexico: Is a double dividend possible? A dynamic general equilibrium assessment (2016) 🗎🗎

This paper simulates the medium- and long-term impact of proposed and expected energy policy on the environment and on the Mexican economy. The analysis has been conducted with a Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy (Three-ME). This model is well suited for policy assessment purposes in the context of developing economies as it indicates the transitional effects of policy intervention. Three-ME estimates the carbon tax required to meet emissions reduction targets within the Mexican "Climate Change Law", and assesses alternative policy scenarios, each reflecting a different strategy for the recycling of tax revenues. With no compensation, the taxation policy would reduce CO2 emissions by more than 75% by 2050 with respect to Business as Usual (BAU), but at high economic costs. Under full redistribution of carbon tax revenues, a double dividend arises: the policy appears beneficial both in terms of GDP and CO2 emissions reduction. (C) 2016 Elsevier Ltd. All rights reserved.

Impact of a carbon tax on the Chilean economy: A computable general equilibrium analysis (2016) 🗎🗎

In 2009, the government of Chile announced their official commitment to reduce national greenhouse gas emissions by 20% below a business-as-usual projection by 2020. Due to the fact that an effective way to reduce emissions is to implement a national carbon tax, the goal of this article is to quantify the value of a carbon tax that will allow the achievement of the emission reduction target and to assess its impact on the economy. The approach used in this work is to compare the economy before and after the implementation of the carbon tax by creating a static computable general equilibrium model of the Chilean economy. The model developed here disaggregates the economy in 23 industries and 23 commodities, and it uses four consumer agents (households, government, investment, and the rest of the world). By setting specific production and consumptions functions, the model can assess the variation in commodity prices, industrial production, and agent consumption, allowing a cross-sectoral analysis of the impact of the carbon tax. The benchmark of the economy, upon which the analysis is based, came from a social accounting matrix specially constructed for this model, based on the year 2010. The carbon tax was modeled as an ad valorem tax under two scenarios: tax on emissions from fossil fuels burned only by producers and tax on emissions from fossil fuels burned by producers and households. The abatement cost curve has shown that it is more cost-effective to tax only producers, rather than to tax both producers and households. This is due to the fact that when compared to the emission level observed in 2010, a 20% emission reduction will cause a loss in GDP of 2% and 2.3% respectively. Under the two scenarios, the tax value that could lead to that emission reduction is around 26 US dollars per ton of CO2-equivalent. The most affected productive sectors are oil refinery, transport, and electricity - having a contraction between 7% and 9%. Analyzing the electricity sector by energy source, the production of electricity from fossil fuels will decrease by 11%, but electricity from renewables will increase by 43%. Electricity producers will pass the cost of the carbon tax to the consumer by increasing the price of electricity by 8%. The findings of this paper will allow policy makers to take better and more informed decisions, by providing a cross-sectoral analysis of the impact on the economy of reducing emissions by 20% by implementing a national carbon tax. (C) 2016 Elsevier B.V. All rights reserved.

Improving air pollution control policy in China-A perspective based on cost-benefit analysis (2016) 🗎🗎

To mitigate serious air pollution, the State Council of China promulgated the Air Pollution Prevention and Control Action Plan in 2013. To verify the feasibility and validity of industrial energy-saving and emission-reduction polices in-the action plan, we conducted a cost-benefit analysis of implementing these policies in 31 provinces for the period of 2013 to 2017. We also completed a scenario analysis in, this study to assess the cost-effectiveness of different measures within the energy-saving and the emission-reduction policies individually. The data were derived from field surveys, statistical yearbooks, government documents, and published literatures. The results show that total cost and total benefit are 118.39 and 748.15 billion Yuan, respectively, and the estimated benefit-cost ratio is 632 in the S3 scenario. For all the scenarios, these policies are cost-effective and the eastern region has higher satisfactory values. Furthermore, the end-of-pipe scenario has greater emission reduction potential than energy-saving scenario. We also found that gross domestic product and population are significantly correlated with the benefit-cost ratio value through the regression analysis of selected possible influencing factors. The sensitivity analysis demonstrates that benefit-cost ratio value is more sensitive to unit emission-reduction cost, unit subsidy, growth rate of gross domestic product, and discount rate among all the parameters. Compared with other provinces, the benefit-cost ratios of Beijing and Tianjin are more sensitive to changes of unit subsidy than unit emission-reduction cost. These findings may have significant implications for improving China's air pollution prevention policy. (C) 2015 Elsevier B.V. All rights reserved.

Policy analysis of greenhouse gases' Mitigation in Iran Energy Sector Using System Dynamics Approach (2016) 🗎🗎

The present study aims to shed new light in the energy supply planning in Iran by adopting a system dynamics (SD) model, so as to provide a quantitative assessment of each option of supply allocation policy, the long-term greenhouse gases (GHG) emissions' trends of the country as a whole. This paper thus presents the projections of future GHG emissions' trend under various options of supply policies for a time span of 15 years. The GHG emissions are projected to reach 6,20,000 tonnes of carbon dioxide equivalent (TCO(2)e) by the year 2021 if the existing supply policy options are followed. 10 different scenarios considering the major variable of economic sanctions -which have recently affected Iran's economy- are developed. By running different scenarios, several fundamental dynamic behaviors can be seen explicitly. The results show that the more allocation of supply resources to the power plants will lessen the GHG emissions in the long run; however this option is quite sensitive to the economic sanctions, so that in case of more economic sanctions, it is not a good decision to be made. More gas injection into the oil reservoirs and less gas exports, is highly efficient in the short term, but its relative effectiveness in not substantial in the long run. Increasing the percentage of oil and gas allocated to the industrial sector, declines cumulative GHG in the long run. The GHG emissions from the power plants' scenario are less in comparison to those from the injection and industry scenarios in the modeling period. However, combined scenarios in the both level of the sanctions are the ideal. (c) 2016 American Institute of Chemical Engineers Environ Prog, 35: 1221-1230, 2016

A sequential approach to integrated energy modeling in South Africa (2016) 🗎🗎

We develop a sequential approach to link 4 bottom-up energy sector model to a detailed dynamic general equilibrium model of South Africa. The approach is designed to simultaneously address the shortcomings and maintain the attractive features of detailed energy sector and general equilibrium models. It also reflects common country-level energy planning processes. We illustrate the capabilities of this integrated bottom-up approach by analyzing the implications of (i) a carbon tax, (ii) liberalization of import supply restrictions in order to exploit regional hydropower potential, and (iii) a combined policy where both carbon taxes and import liberalization are pursued. For the combined scenario, our results suggest substantial emissions reductions relative to Baseline at essentially no cost to economic growth but about a one percent reduction in employment. We conclude that a regional energy strategy, anchored in hydropower, represents a potentially inexpensive approach to decarbonizing the South African economy. The strategy also has political economy attractions in that the combined approach reduces the burden of adjustment of politically sensitive sectors. (C) 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Ghanaian energy economy: Inter-production factors and energy substitution (2016) 🗎🗎

Industries in Ghana depend highly on petroleum to fuel their operations which has brought immerse environmental threat from greenhouse emission gas (GHG). This study tried to investigate potential substitutability of factor inputs and fuel inputs among capital, labor, petroleum and electricity in Ghana by adopting the translog production and cost function approach. We used Ridge regression technique to estimate the parameters after our data show possibility of multicollinearity. Our result shows that, all inputs are substitutes with their relative technological progress also showing evidence of convergence. This suggests that, redirecting resources into the improvement of technology towards cleaner energy production like electricity will be a success over time and this will mean that the fueling of the economy will be done in a cleaner environment and mitigating mitigate CO2 emissions as well. The improvement of electricity production and the promotion of its use require government policies that will enable industries to adjust to the switch from one input to the other through capital subsidies and tax rebates. Also, energy-labor and capital-energy being substitutes in our findings suggest that, removal of all energy subsidies will reduce the use of energy and increase capital and labor intensiveness. Input switch by industries will promote merger of smaller firms with bigger firms that have cost advantage during the switch period and requires a clear government merger control policies. In a nutshell, our findings provide an insight into policies to promote the use of renewable energy, energy intensity and merger policies. (C) 2015 Elsevier Ltd. All rights reserved.

Allowance trading and energy consumption under a personal carbon trading scheme: a dynamic programming approach (2016) 🗎🗎

In response to the challenge of climate change, personal carbon trading was put forward as a policy instrument to promote low carbon behavior in the household sector. To evaluate the effectiveness of this scheme, it is important to gain insight into the allowance trading and energy consumption behavior in a long emission commitment period. This paper proposes a dynamic programming model to investigate allowance trading and energy consumption. A main feature of the model is its consideration of allowance banking and borrowing activities. Ten simulated scenarios with different allowance prices, price volatility and carbon emission rates are discussed. The findings show that consumers would trade more actively when allowance price is volatile. It is also found that energy consumption and allowance trading will decrease when the carbon emission rate increases. Overall the analysis in this paper implies that personal carbon trading scheme would be an effective policy measure to change consumers' behavior. Therefore it would be valuable for decision-makers to consider the introduction and implementation of this scheme. (C) 2015 Elsevier Ltd. All rights reserved.

Asian economic integration and maritime CO2 emissions (2016) 🗎🗎

The Asian region is considered as the most thriving region in terms of economic integration at present. Given the fact that most of the Asian countries' commodity trade relies on maritime transport, its economic integration is expected to affect the shipping activities and consequently maritime CO2 emissions. This study develops a novel and systematic analysis on the key driving factors through which trade liberalization can influence maritime CO2 emissions. Our simulation results suggest that, depending on the level of Asian integration, global CO2 emissions may slightly fall (ASEAN+3 FTA) or even rise (ASEAN+6 FTA). The reason for the latter is that the "trade scale effect" (higher emissions due to a significant increase in trade among participating countries) outweighs the "trade structure effect" and "shipment type effect" (lower emissions as a result of an increase in intra-Asia trade and a change in commodity composition). Finally, all countries involved in the Asian integration, except Japan, will experience an increase in maritime CO2 emissions. In particular, a relatively significant increase in the maritime CO2 emissions occurs in the developing Asian countries owing to substantial trade scale effect after removing their relatively high trade barriers. (C) 2016 Elsevier Ltd. All rights reserved.

The effects of allowance price on energy demand under a personal carbon trading scheme (2016) 🗎🗎

Personal carbon trading (PCT) is a downstream cap-and-trade scheme which could be used to reduce carbon emissions from the household sector. To explore the effectiveness of this scheme, it is necessary to investigate how consumers respond to allowance price change. In this paper, a general utility optimization (GUO) model and a constant elasticity of substitution (CES) utility function are proposed to examine the price, substitution and income effects of carbon allowance price changes. It is shown that higher income consumers are more sensitive to the allowance price changes than lower income consumers. Moreover, the short-run adjustment in consumers' consumption of electricity in response to a change in allowance price would be lower than the long-run value. According to the sensitivity analysis, downward (upward) adjustments in the elasticity of substitution result in a positive (negative) effect on price effect. The findings in this study are used to draw policy implications. Suggestions for future research are also provided. (C) 2016 Elsevier Ltd. All rights reserved.

Features and evolution of international fossil fuel trade network based on value of emergy (2016) 🗎🗎

Fossil fuel is crucial to the development of modern society. The major types of fossil fuel are coal, crude oil and natural gas. The uneven distribution of the production and consumption of fossil fuel makes the fossil fuel flows between countries by international trade. This study aims to quantitatively analyse the features and evolution of the international trade of fossil fuel by complex network and emergy. We transform the trade quantity of coal, crude oil and natural gas into emergy by transformity and the sum of the three emergies is the emergy of fossil fuel. The complex network models of the integrated fossil fuel trade as well as the trade of coal, crude oil and natural gas are built up based on the value of emergy. We analyse the trade relationships, trade quantity, trade density, and hierarchy structure of the networks. We find that the number of trade relationships and the trade quantities follow the power law distribution; countries with many export relationships tend to have many import relationships; the centralization of trade quantity is becoming more intense for fossil fuel, crude oil and coal, but less intense for natural gas; the pattern of top relationships is diversified; the trade density of fossil fuel is increasing; and countries with more than 20 trade relationships tend to have a hierarchy structure. Our findings implicate that as the hierarchy structure is becoming more ordered, the statuses of the countries are clearer, and thus it is easier for policy makers to identify the roles of their own countries or the roles of other countries. Coal is the "cheapest" fuel measuring by "energy cost" and is the most widely traded type of fossil fuel. When two countries exchange fossil fuel and money in the international trade, they should look further into the energy cost of them and reconsider the effectiveness of the trade. Our study can also reveal the trade strategy of the countries. (C) 2015 Elsevier Ltd. All rights reserved.

Capital-energy substitution in manufacturing for seven OECD countries: learning about potential effects of climate policy and peak oil (2016) 🗎🗎

The simultaneous influence of increasing oil scarcity, greenhouse gas control and renewable energy targets will result in a future of sustained energy prices. Whether modern economies can find a smooth path away from fossil fuels is a fundamental socio-economic and political question, which according to standard economics depends to a large extent on the degree of substitution between energy and capital. We study this issue by modelling the manufacturing sector with a translog cost function in seven OECD countries using the EU-KLEMS database for the period 1970-2005. After a literature survey, different production structures accounting for input substitution, returns to scale and technical change are estimated, and substitution elasticities are derived. Our results indicate a general complementarity or weak substitution relationship between energy and capital, suggesting that an increase in energy price, e.g. due to climate policy or scarcer fossil fuels, will likely reduce capital inputs, which might lead to a lower output of manufacturing.

Energy caps: Alternative climate policy instruments for China? (2016) 🗎🗎

Decoupling fossil energy demand from economic growth is crucial for China's sustainable development, especially for addressing severe local air pollution and global climate change. An absolute cap on coal or fossil fuel consumption has been proposed as a means to support the country's energy and climate policy objectives. We evaluate potential energy cap designs that differ in terms of target fuel, point of control, and national versus regional allowance trading using a global numerical general equilibrium model that separately represents 30 provinces in China. First, we simulate a coal cap and find that relative to a cap on all fossil fuels, it is significantly more costly and results in high localized welfare losses. Second, we compare fossil energy cap designs and find that a national cap on downstream fossil energy use with allowance trading across provinces is the most cost effective. Third, we find that a national fossil energy cap with trading is nearly as cost effective as a national CO2 emissions trading system that penalizes energy use based on carbon content. As a fossil energy cap builds on existing institutions in China, it offers a viable intermediate step toward a full-fledged CO2 emissions trading system. (C) 2016 Elsevier B.V. All rights reserved.

Covering Indirect Emissions Mitigates Market Power in Carbon Markets: The Case of South Korea (2016) 🗎🗎

One of the main concerns of policymakers regarding emissions trading markets is that some firms may well enjoy market power owing to their share of the emissions. This study shows that including indirect emissions within the coverage of an emissions trading scheme can help to reduce market power and thereby enhance social efficiency. In this study, the market concentration measured by the Herfindahl-Hirschman Index significantly drops after including indirect emissions in the South Korean emissions trading market. In addition, other market concentration measures are also considered to verify that the conclusion does not depend on the choice of concentration measures.

The initial impact of EU ETS verification events on stock prices (2016) 🗎🗎

This paper studies the impact of verified emissions publications in the European Emissions Trading Scheme (EU ETS) on the market value of participating companies. Using event study methodology on a unique sample of 368 listed companies, we show that verified emissions only resulted in statistically significant market responses when the carbon price was high and allowance scarcity was anticipated. The cross-section analysis of abnormal returns surrounding the publication of verified emissions shows that share prices decrease when actual emissions relative to allocated emissions increase. This negative relationship between allocation shortfalls and firm value is only significant for firms that are either carbon-intensive, compared to sector peers, or are less likely to pass through carbon-related costs in their product prices. The results suggest that although the EU ETS has been deemed unsuccessful so far due to over-allocation and low carbon price, shareholders initially perceived allowance holdings as value relevant. Our results highlight that a significant carbon market price and addressing pass-through costing are essential for successful future reforms of the EU ETS and other analogous carbon cap-and-trade systems implemented or planned worldwide. (C) 2016 Elsevier Ltd. All rights reserved.

Politics and petroleum: Unintended implications of global oil demand reduction policies (2016) 🗎🗎

Environmental degradation and national energy security concerns are among the drivers of domestic and international policies directed towards reducing oil consumption. Often lost in these policy discussions are how such policies may affect world oil producing regions. Assuming a competitive market, a reservoir-specific world oil supply curve representing 2010 production and costs conditions is developed to specifically examine how reductions in world oil demand would affect oil producing regions and how changes in U.S. and world oil demand would affect U.S. dependence on foreign oil in a comparative static analysis. The supply curve is developed using a physical/cost simulator based on industry data. Because of the physical nature of oil reservoirs, countries would be affected differently by reductions in world oil demand. Many of the more impacted countries are relatively more politically unstable than countries with smaller effects. This unintended potential destabilization must be included in the discussion when considering policies to reduce world oil demand. In the absence of game changing technologies, discussion of the U.S. achieving self-sufficiency from demand side management appears to not be meaningful. (C) 2015 Elsevier Ltd. All rights reserved.

Measuring climate policy stringency: a shadow price approach (2016) 🗎🗎

To assess the effect of environmental policy on production structures, trade structures, or foreign direct investment, a measure for the stringency of policy is necessary. Measures typically used in empirical studies share several disadvantages: they are not available on a sectoral basis to reflect concerns of industry competitiveness; they are not available for a wide range of countries to allow for international comparisons; or they are not broad enough to reflect the multidimensionality of environmental policy. This paper develops a thorough, internationally comparable, sector-specific measure of multidimensional climate policy stringency where a shadow price approach serves as a basis. The approach is applied to climate policy by determining sector-specific emission-relevant energy costs on the basis of the sectors' usage of emission-relevant energy carriers and the carriers' respective prices. The resulting shadow price estimates are heterogeneous and can be applied in future research to test for carbon leakage and pollution havens.

External Costs of Energy: How Much Is Clean Energy Worth? (2016) 🗎🗎

This review describes the methodology for the analysis of environmental damages and presents key results obtained by the external costs of energy (ExternE) projects of the European Commission as well as analogous work in the U.S. The classical air pollutants (PM, NOx, SO2, and O-3) due to the combustion of fossil fuels cause significant damage costs. The costs of global warming from the emission of greenhouse gases are also large. We show results for the damage cost per kilogram of emitted pollutant for typical conditions in Europe; they are based on the last version of ExternE (published in 2008), but with a major upward adjustment of the monetary values. We also show results that have been published in the U.S. Combined with the emissions data per kilowatt hour, they yield the damage costs of electric power. For the choice between different power technologies, one should take into account not only the emissions from the power plant but also from the entire fuel chain, using life cycle assessment (LCA) inventories. The damage costs of fossil fuels are much higher than most renewable energy sources. The results provide crucial input for the formulation of rational environmental policies, for example, the appropriate level of pollution taxes and the promotion of cleaner technologies.

Carbon Leakage and Competitiveness of Cement and Steel Industries Under the EU ETS: Much Ado About Nothing (2016) 🗎🗎

In a world of uneven climate policies, concerns about carbon leakage and competitiveness for heavy industries are the main arguments against the implementation of ambitious climate policies. In this paper we investigate a potential competitiveness-driven operational carbon leakage due to the European Union Emissions Trading scheme (EU ETS). We focus on two energy-intensive sectors, cement and steel, and phases I and II of the EU ETS. From a simple analytical model, we derive an equation linking net imports of cement and steel to local and foreign demand along with carbon price. We then econometrically estimate this relation both with ARIMA regression and Prais-Winsten estimation, finding that local and foreign demand are robust drivers of trade flows. We find no significant effect of the carbon price on net imports of steel and cement. We conclude that there is no evidence of carbon leakage in these sectors, at least in the short run.

Using output-based allocations to manage volatility and leakage in pollution markets (2017) 🗎🗎

Output-based allocations (OBAs) are typically used in emission trading systems (ETS) with a fixed cap to mitigate leakage in sectors at risk. Recent work has shown they may also be welfare enhancing in markets subject to supply and demand shocks by introducing some flexibility in the total cap, resulting in a carbon price closer to marginal damage. We extend previous work to simultaneously include both leakage and volatility. We study how OBA permits can be implemented under an overall cap that may change with the level of production in contrast with a design that deducts OBA permits from the overall permit allocation as is the current practice in the EU-ETS and California. We show that introducing OBA permits while keeping the overall cap fixed would only increase price fluctuations and induce severe welfare losses to non-OBA sectors. (C) 2017 Elsevier B.V. All rights reserved.

A comparison between coal-to-olefins and oil-based ethylene in China: An economic and environmental prospective (2017) 🗎🗎

Recently, many coal-to-olefin (CTO) plants have started up in China. It is important for China to answer the following question: between coal-based ethylene and oil-based ethylene, which is the better choice? To provide a reference for policy makers and investors, this paper analyses the economic performance and the impact of future environment policy of both the CTO project and the oil-based ethylene project by a cost-benefit analysis. Quantitative analysis shows that the CTO project has a slight advantage over the oil-based ethylene project in a basic scenario when the crude oil price is above $70/bbl. However, international oil prices have a greater impact on the CTO project than the oil-based ethylene project. Thus, the CTO project has less anti-risk ability to the international oil market fluctuation than the oil based ethylene project. What's more important is the environmental policy impact. After taking carbon trading costs and wastewater surcharge into account, the CTO project no longer has any advantage over the oil-based ethylene project. It can be seen in the foreseeable future that the CTO project will soon lose competitiveness. This indicates that the CTO project may not be consistent with sustainable development. These results suggest that from an environment perspective, policy makers and investors should be prudent about developing the CTO project. (C) 2017 Published by Elsevier Ltd.

The Future of Sustainable Energy Production in Pakistan: A System Dynamics-Based Approach for Estimating Hubbert Peaks (2017) 🗎🗎

This paper presents an effort pertaining to the simulation of the future production in Pakistan of different primary energy resources, i.e., coal, natural gas and crude oil, thereby constructing Hubbert peaks. In this context, the past 45 years' production data of primary energy resources of Pakistan have been analyzed and simulated using a generic STELLA (Systems Thinking, Experimental Learning Laboratory with Animation) model. The results show that the Hubbert peak of Pakistan's crude oil production has been somehow already achieved in 2013, with the highest production of 4.52 million toe, which is 1.51 times the production in 2000. Similarly, the natural gas peak production is expected in 2024 with a production of 32.70 million toe which shall be 1.96-fold the extraction of the resource in the year 2000. On the other hand, the coal production in the country has been historically very low and with a constant production rate that is gradually picking up, the peak production year for the coal is anticipated to be in the year 2080 with an estimated production of 134.06 million. Based on the results of this study, which provide a greater understanding of future energy patterns, it is recommended that an energy security policy be devised for the country to ensure sustained supplies in the future.

Does emission permit allocation affect CO2 cost pass-through? A theoretical analysis (2017) 🗎🗎

Carbon emissions trading may result in CO2 cost pass-through and its rate is influenced by a number of factors. This paper theoretically investigates how emission permit allocation affects CO2 cost pass-through rate by developing a Nash-Cournot oligopolistic market equilibrium model. We find that the derived CO2 cost pass-through rates are consistent when grandfathering and auctioning rules are used for permit allocation, which are higher than that for benchmarking rule. It has also been found that the magnitude of CO2 cost pass-through rate is relevant to the type of definition, product market structure and average carbon intensity of the industry. We suggest that policy makers first use benchmarking rule to attract firms to participate at the early stage of emissions trading system (ETS) and then take auctioning rule when ETS is well developed. (C) 2017 Elsevier B.V. All rights reserved.

Banking on banking: does "when" flexibility mask the costs of stringent climate policy? (2017) 🗎🗎

Banking and borrowing emission allowances provide temporal flexibility in cap-and-trade systems, which can enhance the economic efficiency of environmental policy while adhering to the same cumulative emission budget. This paper investigates the role of temporal ("when") flexibility from emission banking provisions under an economy-wide cap-and-trade policy in the USA. The current literature on meeting deep decarbonization targets almost exclusively assumes unlimited banking, which may bias policy recommendations and have important consequences for R&D prioritization and model development. Numerical experiments using the energy-economic model US Regional Energy, GHG, and Economy (US-REGEN) indicate that assumptions about banking materially impact cost and emission pathways in meeting long-term targets like 80% reductions by 2050 relative to 2005 levels. Given the stringency of long-run targets and convexity of marginal abatement costs, the cost-minimizing time path for mitigation with banking suggests that 2025 abatement should exceed the pledged level under the Paris Agreement (42% instead of 26-28%) to reduce future costs. Total policy costs are approximately 30% higher when banking is excluded; however, political economy barriers and uncertainty may limit the use of banking provisions despite their appeal on economic efficiency grounds. Banking on policy implementation with unlimited temporal flexibility may distort insights about the pace, extent, and economic impacts of future energy transitions associated with long-term abatement targets, especially for more stringent climate policies.

The Catalan Economy towards the New European Energy Policy: Through Accounting of Greenhouse Emission Multipliers (2017) 🗎🗎

The aim of this paper is to study the effect that implementing the agreement signed by the European Union at the end of 2008 will have on reducing greenhouse gas emissions in Catalonia. Emission multipliers and the impact of reducing emissions by 10%, in sectors not covered by the EU ETS (EU Emissions Trading System) and reducing those that are covered by 21%, are analysed. More specifically, the effects on the endogenous income of the multiplier model (production, factorial and private income) is studied, while reducing and increasing endogenous income and the decomposition of emission multipliers into open, own and circular effects is analysed to include the different channels of the process of generating CO2 equivalent emissions. The empirical application is for the Catalan economy and uses economic and environmental data for the year 2001. The results show that increases in greenhouse gas emissions will essentially depend on the account that receives the exogenous inflow in demand. Greenhouse gas emissions in Catalonia are affected very differently at the sectoral level and the effects of production activities, factors of production and consumption on air pollution are very heterogeneous. The analytical approach used in this paper provides interesting results that can help to design and implement policies to reduce emissions.

Carbon tax effects on the poor: a SAM-based approach (2017) 🗎🗎

A SAM-based price model for Mexico is developed in order to assess the effects of the carbon tax, which was part of the fiscal reform approved in 2014. The model is formulated based on a social accounting matrix (SAM) that distinguishes households by the official poverty condition and geographical area. The main results are that the sector that includes coke, refined petroleum and nuclear fuel shows the highest price increase due to the direct impact of the carbon tax; in addition, air transport and inland transport are the most affected sectors, in an indirect manner, because both employ inputs from the former sector. Also, it is found that welfare diminishes more in the rural strata than in the urban one. In the urban area, the carbon tax is regressive: the negative impact of carbon tax on family welfare is greater on the poorest families.

Market Analysis during the First Year of Korea Emission Trading Scheme (2017) 🗎🗎

To derive the supply and demand issues during the first phase of the Korea Emission Trading Scheme (KETS), we investigated the excess or shortage, and the carry-over inflow of carbon emission permits for all of the domestic industries and major corporations. In particular, this study explored the supply and future prospects of offset credits, as well as the allocated permits, by forecasting the inflows of offset credits using the amount of certified reduction in domestic boundaries and overseas sources. We observed both the supply and demand of permits and changes in carbon dioxide (CO2 ) emission levels during the first phase (2015-2017) by comparing the estimated emission levels and the total permit supply. The results showed that permits were either in surplus or insufficient, depending on the sub-sector, and that a surplus in the supply of permits would occur if companies do not carry over more than 70 million tons of permits to the next period.

Induced technological change and energy efficiency improvements (2017) 🗎🗎

We present a theoretical and empirical model which (1) shows that the demand for energy is shifted down by innovations in energy intensive sectors and (2) highlights the drivers of innovative activity in these sectors. The theoretical model and the empirical analysis of patent and energy data indicate that the level of innovative activity is determined by energy expenditure as well as international and inter-temporal spillovers. The solution of the theoretical model along the balanced growth path suggests that in general equilibrium the level of innovative activity depends on the growth rate of energy generation cost. The model predicts also that a level increase in the cost of energy does not alter the long-run energy share of income. Finally, we show that our results can be used to calibrate Integrated Assessment Models to project energy efficiency growth. (C) 2017 Published by Elsevier B.V.

Low carbon supply chain with energy consumption constraints: case studies from China's textile industry and simple analytical model (2017) 🗎🗎

Purpose - This paper aims to discuss the low carbon supply chain practices in China's textile industry. To curb greenhouse gas emissions, the Chinese government has launched restrict regulatory system and imposed the energy consumption constraint in the textile industry to guarantee the achievability of low carbon economy. The authors aim to examine how the energy consumption constraint affects the optimal decisions of the supply chain members and address the supply chain coordination issue. Design/methodology/approach - The authors conduct two case studies from Chinese textile companies and examine the impact of energy consumption constraints on their production and operations management. Based on the real industrial practices, the authors then develop a simple analytical model for a low carbon supply chain in which it consists of one single retailer and one single manufacturer, and the manufacturer determines the choice of clean technology for energy efficiency improvement and emission reduction. Findings - From the case studies, the authors find that the textile companies develop clean technologies to reduce carbon emission in production process under the energy consumption enforcement. In this analytical model, the authors derive the optimal decisions of the supply chain members and reveal that supply chain coordination can be achieved if the manufacturer properly sets the reservation wholesale price (WS) despite the production capacity can fulfill partial market demand under a WS (or cost sharing) contract. The authors also find that the cost-sharing contract may induce the manufacturer to increase the investment of clean technology and reduce the optimal WS. Originality/value - This paper discusses low carbon supply chain practices in China's textile industry and contributes toward green supply chain development. Managerial implications are identified, which are beneficial to the entire textile industry in the developing countries.

Nuclear Phase-out Under Stringent Climate Policies: A Dynamic Macroeconomic Analysis (2017) 🗎🗎

In this paper we investigate the long-run economic consequences of phasing out nuclear energy in the presence of stringent climate policies. We integrate endogenous growth theory and technology-based activity analysis into a dynamic numerical general equilibrium model. Both market-based and policy-mandated nuclear phase-out are studied. Using data from the Swiss economy we find that the aggregate welfare loss of carbon policy is as large as 1.21% and that nuclear phase-out raises the loss to 1.58%. Nuclear phase-out has no significant effect on economic growth. Increased investment, induced innovation, and sectoral change are the reasons that the economic impact of nuclear phase-out and the trade-off between energy and climate policy are moderate, once the dynamics of an economy are taken into account. Optimal phase-out time for nuclear depends mainly on future cost escalation in the energy sector.

US policy spillover(?) - China's accession to the WTO and rising exports to the EU (2017) 🗎🗎

The paper analyzes transmission of bilateral trade policies on multilateral exports, due to existence of a global component in fixed export entry costs. Liberalization in one destination market induces redistribution of this global burden across multiple export destinations, thereby lowering the entry threshold in each of them. The empirical analysis exploits reduced US tariff uncertainty upon China's WTO accession, and examines its effect on China's EU exports. The main results reveal that: (i) the structure of China's export boom to the EU conforms to patterns of US tariff uncertainty; (ii) the adjustment takes place at the extensive margin; and (iii) the effect phases out after a few years. Evidence in support of a fixed-cost redistribution is also presented. The findings have implications for the scope of international policy negotiations and provide suggestive evidence on the nature of fixed costs faced by manufacturing firms in low-wage countries. (C) 2017 Elsevier B.V. All rights reserved.

Simulating Indonesian fuel subsidy reform: a social accounting matrix analysis (2017) 🗎🗎

The debate over phasing out fuel subsidies in Indonesia is quite intense. Recent studies pointed out an unfair distribution of subsidies. Besides this, the burden of fuel subsidies to Indonesian government is expected to increasingly continue in parallel with rising fuel consumption as well as international oil prices. However, recent experiences indicated that phasing out the fuel subsidy could potentially result in adverse effects in the economy. Then, the need for comprehensive economy-wide analyses in order to reveal diverse impacts of these subsidies, has emerged. The main objective of this study is to estimate the impacts of fuel subsidies from the economic, social, and environmental perspective, and to propose policy options for a subsidy reform. For this purpose, a social accounting matrix model is employed to simulate the impact analysis. Scenarios including reallocation of subsidy to either other sectors (sectoral subsidy) or income groups (target subsidy) are simulated and the social, economic and environmental impacts of these scenarios are presented. The results show that reallocation of fuel subsidy to other sectors will be able to positively increase the overall economic development, while compromising environmental aspects. The direct reallocation of subsidy to the low income households, on the other hand, will slow down overall economic development but show a positive result for social welfare.

Oil consumption subsidy removal in OPEC and other Non-OECD countries: Oil market impacts and welfare effects (2017) 🗎🗎

This paper studies the oil market effects of phasing out oil consumption subsidies in the transport sector. Welfare effects indifferent countries are also examined, The paper further investigates potential feedback mechanisms of oil subsidy removal via lower oil prices in the global oil market, which may stimulate oil consumption in other regions. An intertemporal numerical model of the international oil market is applied, where OPEC -Core producers have market power. The major subsidisers of oil are OPEC countries, and the effects of subsidy removal here are quite pronounced. Consumption of oil in the transport sector of OPEC countries declines significantly. As a result, the global oil price falls slightly, and other regions increase their oil consumption to some degree. Although OPEC consumers are worse off by the subsidy removal, total welfare in OPEC increases due to higher profits from oil production. (C) 2017 Elsevier B.V. All rights reserved.

Environmental regulatory stringency and the market for abatement goods and services in China (2017) 🗎🗎

We provide an examination of the linkage between environmental regulation stringency and the demand for and supply of abatement goods and services. To that end we construct a five-equation simultaneous model that links environmental regulation stringency to abatement output through various underlying simultaneous mechanisms. This system is then estimated using a panel of 679 eco-firms in 78 industrial Chinese cities during the implementation period of collection and use of pollution discharge fees (promulgated by the Chinese State Council) from 2003 to 2007. We find that higher fees are generally associated with higher abatement supply but for some industries - notably wastewater treatment - there is evidence of 'output restriction', meaning that higher charges lead to a reduction in supply for established firms. (C) 2017 Elsevier B.V. All rights reserved.

Optimal production and carbon emission reduction level under cap-and-trade and low carbon subsidy policies (2017) 🗎🗎

In recent years, massive carbon emissions have caused serious global environmental damage such as a worsening greenhouse effect and thick haze. To curb carbon emissions as well as maintain sustainable economic development, governments promote the development of low carbon economy by issuing multiple policies among which the cap-and-trade policy (CTP) and low carbon subsidy policy (LCSP) are widely adopted. Moreover, manufacturers are increasingly adopting carbon emission reduction technology to produce greener products considering related government policies and rising environmental awareness among consumers. To give policy-making insights to governments as well as production and carbon emission reduction decision-making insights to manufacturers, this paper investigates the impacts of CTP and LCSP on the production and carbon emission reduction level of a manufacturer, and explores which policy is better for society. The results show that the carbon emission reduction level increases as the carbon trading price increases, whereas it is independent of the unit low carbon subsidy. Interestingly, the carbon trading price does not always have a negative effect on the manufacturer's profit, and the cap does not always produce a positive effect on the manufacturer's profit. More importantly, we find that LCSP is more beneficial to society when the environmental damage coefficient is less than a threshold, but otherwise CTP is more beneficial. (C) 2017 Published by Elsevier Ltd.

Impact of efficiency, investment, and competition on low carbon manufacturing (2017) 🗎🗎

Low carbon economy has become a top agenda for many countries following the agreement in the Paris meeting on climate change. In this article, we take price and emission sensitive demand into account and incorporate competition between the two rival manufacturers in the demand function. This research takes more proactive actions incorporating carbon emissions in the strategic and operational decisions, which complements the existing literature on low carbon manufacturing, in which the carbon emissions attribute is often used as a constraint, or only the single manufacturer's demand is considered. Based on game theory, the pricing and carbon emissions reduction decisions are investigated. Our study contributes to the existing literature on low carbon manufacturing by specifically examining the impact of production efficiency, carbon emissions reduction efficiency, and market power structure on achieving low carbon manufacturing. Through the systematic analysis of optimal pricing and green technology investment decisions to improve the economic and environmental performance under different market power structures, our findings provide valuable managerial implications, which will help many manufacturing firms to make important strategic and operational decisions regarding low carbon manufacturing. (C) 2016 Elsevier Ltd. All rights reserved.

Analyzing the distributional effects of fuel taxation in China (2017) 🗎🗎

As an effective policy instrument to reduce energy consumption and CO2 emissions, the effects of fuel taxation on income distribution have been the critical factor that determines whether a fuel tax could be acceptable in China. This paper estimates the distributional effects of a fuel tax on households in various income groups by using the input-output model. Results indicate that the total distributional effects of fuel taxes are moderately progressive; that is, high-income households would bear more tax burden compared to low-income households. In addition, the indirect effects are larger than the direct effects. Moreover, the Kakwani and Suits indices show that fuel excise taxes are progressive, implying that a fuel tax could improve the unfair income distribution. In order to reduce the negative impact of fuel taxes on low-income households, it is necessary for the government to design a reasonable redistribution mechanism of tax revenue or adopt compensatory measures such as the transfer payments targeted on low-income groups.

Deadline Differentiated Pricing of Deferrable Electric Loads (2017) 🗎🗎

A large fraction of total electricity demand is comprised of end-use devices whose demand for energy is inherently deferrable in time. Of interest is the potential to use this latent flexibility in demand to absorb variability in power supplied from intermittent renewable generation. A fundamental challenge lies in the design of incentives that induce the desired response in demand. With an eye to electric vehicle charging, we propose a novel forward market for deadline-differentiated electric power service, where consumers consent to deferred service of prespecified loads in exchange for a reduced price for energy. The longer a consumer is willing to defer, the lower the price for energy. The proposed forward contract provides a guarantee on the aggregate quantity of energy to be delivered by a consumer-specified deadline. Under the earliest-deadline-first (EDF) scheduling policy, which is shown to be optimal for the supplier, we explicitly characterize a non-discriminatory, deadline-differentiated pricing scheme that yields an efficient competitive equilibrium between the supplier and consumers. We further show that this efficient pricing scheme, in combination with EDF scheduling, is incentive compatible in that every consumer would like to reveal her true deadline to the supplier, regardless of the actions taken by other consumers.

Emissions in a decarbonised economy? Global lessons from a carbon footprint analysis of Iceland (2017) 🗎🗎

Decarbonisation of stationary energy supply, particularly electricity grids, is the current focus of climate change mitigation policy. However, studies have suggested that this narrow policy focus is insufficient to achieve meaningful global emissions reductions. Using Iceland as a case study, this paper demonstrates that significant emissions arise from transport and imported products, which are often not fully captured in territorial GHG inventories. This results in high greenhouse gas emissions per capita regardless of the nation's domestic energy supply. The result is a low carbon illusion in which rich economies believe they are reducing their GHG responsibility whilst global emissions continue to grow. This paper presents the first consumption-based carbon footprint (CBCF) analysis for Iceland, a nation where the stationary energy supply is 99% renewable, and could be viewed as a decarbonisation 'future case' for rich nations globally. The study combines Icelandic household expenditure data with the Multi Regional Input-Output database Eora to calculate the CBCF of Icelandic households. The average annual CBCF of Icelandic households was 10.4 tCO(2)eq/capita, similar in magnitude to other EU nations despite Iceland's unique energy supply. GHG emissions from transport, food and goods dominated the household CBCF. The national CBCF was higher than most European nations and 55% higher than the territorial emissions inventory. Approximately 71% of household emissions were attributed to imported goods, which were mapped globally revealing that the GHG emissions burden of Icelandic consumption falls primarily on developing nations. The findings suggest that a broader GHG accounting framework and resulting policy focus is required, both in Iceland and globally, that incorporates both supply and demand-based GHG reduction strategies. (C) 2017 Elsevier Ltd. All rights reserved.

The economy impacts of Korean ETS with an emphasis on sectoral coverage based on a CGE approach (2017) 🗎🗎

South Korea initiated an emissions trading scheme (ETS) on January 1, 2015. Based on this environmental policy, at the 21st Conference of Parties (COP) meeting, the Korean government announced that it would decrease carbon emissions 37% from business as usual (BAU) levels by 2030. Since this target is too ambitious for the Korean economy, a number of studies have analyzed the economic impacts of emissions trading in Korea, but few have distinguished between industries covered and not covered by the ETS, notwithstanding the lack of industry-level data on quotas and emissions. This study overcomes such shortcomings by converting a dataset of 525 firms covered by the South Korea ETS (SK-ETS) into a 28-sector database consistent with the Global Trade Analysis Project (GTAP) classifications. We implement a simulation of the SK-ETS with a computational general equilibrium (CGE) model. Simulation results suggest that while SK-ETS has significant abatement effects (-2.56% from the base case), it only has mild negative impacts on GDP (0.41%) and household consumption (0.11%). Industry output on average falls by 0.54%, with the gas and air transport sectors most adversely affected. The most noticeable price changes are from the electricity sector, whose output price goes up by 3.75%. It is noteworthy that because of the export-oriented economy, many global business leaders and politicians have argued that the ETS will disadvantage exporting companies, while the simulation results showed a higher trade surplus based on enhanced competitiveness.

Escape from Third-Best: Rating Emissions for Intensity Standards (2017) 🗎🗎

An increasingly common type of environmental policy instrument regulates the carbon intensity of transportation and electricity markets. In order to extend the policy's scope beyond point-of-use emissions, regulators assign each potential fuel an emission intensity rating for use in calculating compliance. I show that welfare-maximizing ratings do not generally coincide with the best estimates of actual emissions. In fact, the regulator can achieve a higher level of welfare by properly selecting the emission ratings than possible by selecting only the level of the standard. Moreover, a fuel's optimal rating can actually decrease when its estimated emission intensity increases. Numerical simulations of the California Low-Carbon Fuel Standard suggest that when recent scientific information increased the estimated emissions from conventional ethanol, regulators should have lowered ethanol's rating (making it appear less emission-intensive) so that the fuel market would clear with a lower quantity.

Implications of the EU Emissions Trading System for the South-East Europe Regional Electricity Market (2017) 🗎🗎

As part of its climate policy, the European Union (EU) aims to reduce greenhouse gas (GHG) emissions levels by 20% by the year 2020 compared to 1990 levels. Although the EU is projected to reach this goal, its achievement of objectives under its Emissions Trading System (ETS) may be delayed by carbon leakage, which is defined as a situation in which the reduction in emissions in the ETS region is partially offset by an increase in carbon emissions in the non-ETS regions. We study the interaction between emissions and hydropower availability in order to estimate the magnitude of carbon leakage in the South-East Europe Regional Electricity Market (SEE-REM) via a bottom-up partial equilibrium framework. We find that 6.3% to 40.5% of the emissions reduction achieved in the ETS part of SEE-REM could be leaked to the non-ETS part depending on the price of allowances. Somewhat surprisingly, greater hydropower availability may increase emissions in the ETS part of SEE-REM. However, carbon leakage might be limited by demand response to higher electricity prices in the non-ETS area of SEE-REM. Such carbon leakage can affect both the competitiveness of producers in ETS member countries on the periphery of the ETS and the achievement of EU targets for CO2 emissions reduction. Meanwhile, higher non-ETS electricity prices imply that the current policy can have undesirable outcomes for consumers in non-ETS countries, while non-ETS producers would experience an increase in their profits due to higher power prices as well as exports. The presence of carbon leakage in SEE-REM suggests that current EU policy might become more effective when it is expanded to cover more countries in the future. (C) 2017 Elsevier B.V. All rights reserved.

Energy consumption, inter-fuel substitution and economic growth in Nigeria (2017) 🗎🗎

Nigeria's energy mix has been dominated by petroleum with a year on year increase due to huge petroleum subsidy by the government. This study adopts the translog production function to investigate the potential for inter-factor and inter-fuel substitution between capital, labor, petroleum and electricity. Ridge regression has been adopted to estimate the model's parameters due to evidence of multi-collinearity in the data. The results show that all input pairs are substitutes; and as such, adopting competitive pricing policies and removal of petroleum subsidies and price ceilings would redirect industries towards an increased use of electricity and increase capital and labor intensiveness. In addition, the study shows that a 5% and 10% increase of investment in petroleum reduction technologies for the period 2010, 2011 and 2012 would reduce CO2 emissions by 1.13518, 1.8554, 1.2722 and 2.27119, 2.37109, 2.49444 million metric tons respectively. Furthermore, the study points to evidence for convergence in relative technical progress among the various input pairs with electricity registering the fastest rate. These imply that petroleum would gradually lose its dominance in Nigerian energy mix. (C) 2016 Elsevier Ltd. All rights reserved.

Household carbon footprints in the Baltic States: A global multi-regional input-output analysis from 1995 to 2011 (2017) 🗎🗎

The paper analyzes consumption related household CO2 equivalent (CO2e), emissions for the three Baltic States - Estonia, Latvia and Lithuania from 1995 to 2011. The analysis is based on a multi-regional input-output model, which allows us to estimate life-cycle emissions for all major household consumption items. Results demonstrate that household carbon footprints in all the Baltic States significantly increased by 47% in Estonia, 20% in Latvia and 52% in Lithuania during the study period. In 2011 in Estonia expenditures for housing and utility contributed the highest per capita life-cycle emissions 43%. However, in Lithuania housing accounted only for 16% of per capita emissions, but food and transport were responsible for 31%; whereas in Estonia and Latvia transport accounted for 18% and 21%, respectively. Production processes related to food consumption are responsible for 18% of emissions in Estonia, 31% in Latvia and Lithuania. Most of the indirect emissions are related to imports from Russia and China followed by imports from other Baltic States. If consumptio n-based emissions are to decrease countries will have to (1) change household behavior, which requires relevant knowledge, infrastructure and resources to facilitate switching to lower carbon-intensive alternatives; (2) decarbonize their own energy and transport sectors; and (3) reduce lifecycle emissions associated with trade, by supporting imports from low carbon regions, including producing locally. (C) 2016 Elsevier Ltd. All rights reserved.

Asymmetric effects of the business cycle on carbon dioxide emissions (2017) 🗎🗎

Long-term carbon dioxide emissions forecasts rely on the assumption that the economic growth rate is constant over long time horizons and exclude the business cycle, thereby ignoring a fundamental component of the macroeconomy. This paper considers how the business cycle affects emissions forecasts and shows the implicit assumption in current forecasts, that the elasticity of emissions is constant with respect to GDP, is wrong. In the United States, emissions fall more sharply when GDP declines than they rise when GDP increases. This is partly due to a decrease in industrial energy intensity as GDP declines. A simulation shows that accounting for the business cycle results in 5% lower cumulative emissions through 2050 relative to the baseline forecast. (C) 2016 Elsevier B.V. All rights reserved.

Strategic oil stockpiling for energy security: The case of China and India (2017) 🗎🗎

Compared with the developed countries, the developing countries could be more vulnerable to oil supply disruptions due to their lack of strategic petroleum reserves (SPRs). Several developing countries, including China and India, are establishing their SPRs to ensure energy security. In the common world oil market, one country's SPR decisions can be affected by the decisions of other countries. This paper investigates the SPR policies of China and India, two of the largest developing countries, in a game-theoretic framework, where the interactions between the two countries are taken into account. The results show that players equilibrium stockpiling strategies and total expected costs could vary significantly with the initial oil market state, stockpile acquisition capacity and the probabilities for disruptions to persist. (C) 2016 Elsevier B.V. All rights reserved.

Enterprise investment, local government intervention and coal overcapacity: The case of China (2017) 🗎🗎

Long-term management of China's coal overcapacity depends on the targeted policy guidance on industry production capacity expansion in the overcapacity formation process. In this study, coal enterprise and local government are treated as game participants, and a three-stage dynamic game model has been developed to depict the boosting effect of the game behavior of coal enterprise's and local government's capacity investments in different markets of supply and demand. The results are shown in the following: (1) local government has been the "behind-the-scenes" operator of over-investment and redundant construction, and its excessive interventions in coal industry investment have been the primary cause of overcapacity formation; (2) when the market is in short supply, coal enterprise's optimal behavior is to continuously increase the rate of investment growth until it reaches the threshold to obtain the maximum excess profits, ultimately leading to overinvestment in the industry; and (3) the key factors affecting the game abilities of coal enterprise and local government are the market's self-regulation and the central government's supervision intensity. Although the Chinese government, a highly vertically oriented bureaucratic structure, is implementing a mandatory de-capacity policy to alleviate the intensity of excessive coal capacity, it is not a long-term regularization on the supply-side reform.

Mapping the carbon footprint of EU regions (2017) 🗎🗎

While the EU Commission has encouraged Member States to combine national and international climate change mitigation measures with subnational environmental policies, there has been little harmonized effort towards the quantification of embodied greenhouse gas (GHG) emissions from household consumption across European regions. This study develops an inventory of carbon footprints associated with household consumption for 177 regions in 27 EU countries, thus, making a key contribution for the incorporation of consumption-based accounting into local decision-making. Footprint calculations are based on consumer expenditure surveys and environmental and trade detail from the EXIOBASE 2.3 multiregional input-output database describing the world economy in 2007 at the detail of 43 countries, 5 rest-of-the-world regions and 200 product sectors. Our analysis highlights the spatial heterogeneity of embodied GHG emissions within multiregional countries with subnational ranges varying widely between 0.6 and 6.5 tCO(2)e/cap. The significant differences in regional contribution in terms of total and per capita emissions suggest notable differences with regards to climate change responsibility. The study further provides a breakdown of regional emissions by consumption categories (e.g. housing, mobility, food). In addition, our region-level study evaluates driving forces of carbon footprints through a set of socio-economic, geographic and technical factors. Income is singled out as the most important driver for a region's carbon footprint, although its explanatory power varies significantly across consumption domains. Additional factors that stand out as important on the regional level include household size, urban-rural typology, level of education, expenditure patterns, temperature, resource availability and carbon intensity of the electricity mix. The lack of cross-national region-level studies has so far prevented analysts from drawing broader policy conclusions that hold beyond national and regional borders.

The European Union possibilities to achieve targets of Europe 2020 and Paris agreement climate policy (2017) 🗎🗎

The Europe 2020 strategy and recently ratified Paris agreement are the main documents in the European Union (EU) involving energy and climate policy. Therefore, the aim of this paper is to reveal the possibilities of EU countries to achieve the Europe 2020 strategy and Paris agreement targets. Referring to the regression analysis, the results showed that the growth of economy and primary energy consumption stimulate GHG emissions in EU-28; meanwhile, the increase of RES share decreased them. Moreover, the paper revealed that if the EU will achieve its targets committed in the Europe 2020 strategy, even assuming fast economic growth, the target to reduce GHG emission by 20% by 2020 compared to 1990 will be achieved. According to different tendencies of economic growth, energy consumption and share of RES changes, the results showed that only recent (2005-2012) tendencies are the most suitable for the implementation of GHG emissions targets of Europe 2020 strategy but not of the Paris agreement. Therefore, the EU countries should attempt more to reduce energy consumption and to increase the share of RES seeking to implement the target of GHG emissions committed in Paris agreement. (C) 2017 Elsevier Ltd. All rights reserved.

Promotion policies for renewable energy and their effects in Taiwan (2017) 🗎🗎

Taiwan is an interesting case in bioenergy development, and its government has employed several subsidies to promote bioenergy, such as released land compensation and energy crop subsidies; however, how farmers respond to these economic incentives is not clear. The study employs the concept of "Big Data" by incorporating data on the input output of crop production, demand elasticities, international trade and tariffs, processing technologies, commodity prices and energy prices for more than 85% of Taiwanese agricultural and forest commodities. The study first utilizes a mathematical programming model to examine the effectiveness of these policies in terms of bioenergy production and GHG (greenhouse gas) emissions reduction and then applies the dynamic structural equation model to analyze the interactions among important input and output factors, such as social welfare, energy prices, bioenergy production, GHG emissions and CO2 trade prices. The results show that (1) the GHG price is more effective than the coal price in the sense of reducing the ethanol production; (2) the gasoline price has a negative impact on contemporary electricity production while the coal and GHG prices have positive impacts; (3) current ethanol production has a negative influence on current GHG emissions reductions; and (4) the gasoline price, coal price, GHG price and GHG emissions reductions have a significant positive impact on contemporary welfare. (C) 2016 Elsevier Ltd. All rights reserved.

Cross subsidy removal in electricity pricing in India (2017) 🗎🗎

In India electricity price for agriculture is cross subsidized by the industries. The Indian government has started a process through which the extent of cross subsidization is gradually being reduced. The idea is to replace the cross subsidization by 2030 and introduce a rate structure that will increase with the amount of electricity usage. This paper ices the Computable General Equilibrium framework to evaluate the ex-ante impact of these policy changes on the Indian economy. The paper finds that removal of cross subsidies will increase inflation particularly food inflation resulting in a decline in household incomes more so in rural areas. Replacing cross subsidies with a progressive rate structure will compensate for only a small part of the negative effects of the removal of cross subsidies. Four other policy options are also investigated targeting household incomes, food inflation and general inflation. Most of these options do not work as the required increase in budget deficit is unlikely to be bearable to the government The only feasible option appears to be a direct price subsidy to agricultural sector: in this case food prices are held down, inflation is moderate and effect on household incomes is minimal.

What policy adjustments in the EU ETS truly affected the carbon prices? (2017) 🗎🗎

Carbon market becomes increasingly popular as a cost-effective instrument to mitigate CO2 emissions. However, its construction is a learning-by-doing process, and needs consistent regulatory updates in order to deliver optimal effects. This paper uses the event study method to assess the impacts of different policy adjustments on the EUA returns in the European Union Emissions Trading Scheme (EU ETS) since 2005. Comparing to existing studies that focus on the impact of a single policy, this paper provides a complementary reference on if and to what extent policy adjustments can impact the carbon prices by classifying all regulatory update events into six categories. Its key findings are as follows. First, aggregate impacts of total 50 events studied are low while impacts of events having underlying negative impacts are higher than those having underlying positive impacts. Second, 24 events have significant impacts on EUA returns and are coherent to their theoretical impacts (except one event). Third, events having negligible impact on EUA returns are those that are announced not for the first time or those having no impact on CO2 quotas supply and demand. Finally, there are different impact patterns: some events have different impacts on short-end and long-end carbon prices.

Employing a CGE model in analysing the environmental and economy-wide impacts of CO2 emission abatement policies in Malaysia (2017) 🗎🗎

The impact of global warming has received much international attention in recent decades. To meet climate change mitigation targets, environmental policy instruments have been designed to transform the way goods and services are produced as well as alter consumption patterns. The government of Malaysia is strongly committed to reducing CO2 gas emissions as a proportion of GDP by 40% from 2005 levels by the year 2020. This study evaluates the economy-wide impacts of implementing two different types of CO2 emission abatement policies in Malaysia using market-based (imposing a carbon tax) and command-and-control mechanism (sectoral emission standards). The policy simulations conducted involve the removal of the subsidy on petroleum products by the government. A carbon emission tax in conjunction with the revenue neutrality assumption is seen to be more effective than a command-and-control policy as it provides a double dividend. This is apparent as changes in consumption patterns lead to welfare enhancements while contributing to reductions in CO2 emissions. The simulation results show that the production of renewable energies is stepped up when the imposition of carbon tax and removal of the subsidy is augmented by revenue recycling. This study provides an economy-wide assessment that compares two important tools for assisting environment policy makers evaluate carbon emission abatement initiatives in Malaysia. (C) 2017 Elsevier B.V. All rights reserved.

Improving footprint calculations of small open economies: combining local with multi-regional input-output tables (2017) 🗎🗎

In a small, open and resource-poor economy, import and export dependency have an ever-growing impact on local policy decisions, which makes local (environmental) policy-makers increasingly depend on global data. This increases the interest in models that link local production and consumption data to global production, trade and environmental data. The recent increase in availability of global environmentally extended multi-regional input-output tables (EE-MRIO tables) provides an opportunity to link them with existing local environmentally extended input-output tables (EE-RIO tables). These combined tables make it possible (1) to analyse the links between local and global production and consumption and (2) to study global value chains, material use and environmental impacts simultaneously. However, estimations using input-output (I-O) analyses contain errors due to imperfect databases. In this article the magnitude of specification, aggregation and time errors are estimated and compared. The results show the need to combine local datasets with multi-regional ones and show that highest detailed (country and sector levels) as well as time series of I-O tables are the way forward for using I-O analyses in local policy-making. The paper provides guidance on trading off investments in model adoption and/or extension and the reliability of estimation results.

Does energy-price regulation benefit China's economy and environment? Evidence from energy-price distortions (2017) 🗎🗎

China's energy prices have long been regulated due to the critical role energy plays in economic growth and social development, which leads to energy-price distortion to some extent. To figure out whether energy-price regulations will benefit China's economy (measured by GDP growth) and environment (measured by carbon emissions), we conducted an in-depth simulation using path analysis, where five energy products (natural gas, gasoline, fuel oil, steam coal, and coking coal) are selected and three measurements (absolute, relative, and moving) of energy-price distortions are calculated. The results indicate that, with a series of energy pricing policies, the price distortion for a single type of energy has gradually transformed, while the energy pricing system in China is not fully market-oriented yet. Furthermore, China's economy benefits from relative and moving distortions, while the absolute distortions of energy prices have negative impacts on economic growth. Finally, with regard to the environment, carbon emissions call for fewer distortions.

The effects of economic and political integration on power plants' carbon emissions in the post-soviet transition nations (2017) 🗎🗎

The combustion of fossil fuels for electricity generation, which accounts for a significant share of the world's CO2 emissions, varies by macro-regional context. Here we use multilevel regression modeling techniques to analyze CO2 emissions levels in the year 2009 for 1360 fossil-fuel power plants in the 25 post-Soviet transition nations in Central and Eastern Europe and Eurasia. We find that various facility-level factors are positively associated with plant-level emissions, including plant size, age, heat rate, capacity utilization rate, and coal as the primary fuel source. Results further indicate that plant-level emissions are lower, on average, in the transition nations that joined the European Union (EU), whose market reforms and environmental directives are relevant for emissions reductions. These negative associations between plant-level emissions and EU accession are larger for the nations that joined the EU in 2004 relative to those that joined in 2007. The findings also suggest that export-oriented development is positively associated with plant-level CO2 emissions in the transition nations. Our results highlight the importance in macro-regional assessments of the conjoint effects of political and economic integration for facility-level emissions.

GHG mitigation schemes and energy policies: A model-based assessment for the Italian economy (2017) 🗎🗎

We build up a large scale dynamic general equilibrium model embodying a cap on pollutant emissions, an electricity sector and fuel consumption to analyse climate-energy policies for the Italian economy. Our results show how the trade-off between environmental quality and economic activity can be effectively overcome by recycling the revenues from the sales of emission permits in labour tax reductions. A tax combination aimed at reducing the consumption of fossil fuel, while simultaneously decreasing taxes on labour, is expansionary, but the final outcome is influenced by the underlying GHG emission policy. Tax incentives encouraging the use of clean energy sources, by discouraging the use of fossil fuel, produce a sizeable reallocation of emissions across sectors and are found to be expansionary. Overall the paper highlights the non-trivial interactions between the different fiscal tools in hand to meet the legally binding commitment on emission reduction, while limiting the potential negative fallout on the economy.

Evaluating the carbon leakage effect on cement sector under different climate policies (2017) 🗎🗎

The European-Union Emissions Trading System (EU-ETS) is a cap and trade scheme that requires the industries participating in the program to obtain allowances to cover their carbon emissions. Energy Intensive Industries claim that this system puts their European plants at an economics disadvantage compared to facilities located outside the EU. As a direct consequence, industries may relocate their production activities in unregulated countries, leading to the so-called carbon leakage effect. In order to curb this effect, several policies have been devised, including grandfathering of CO2 allowances and border tax adjustment. This paper investigates the impact of these two policies on the cement sector, with a particular focus on the Italian market, particularly prone to carbon leakage. The analysis is based on an oligopolistic partial equilibrium model with a detailed technological representation of the market. The model is a Generalized Nash Equilibrium Problem that accounts for the interactions of cement companies. Simulations show that neither the grandfathering nor the border tax adjustment fully solve the carbon leakage problem because cement companies modify their cement and clinker trade strategies according to the measure applied in order to avoid or reduce their carbon costs. (C) 2015 Elsevier Ltd. All rights reserved.

Striking a balance between profit and carbon dioxide emissions in the Saudi cement industry (2017) 🗎🗎

Cement manufacturing is a major industry in Saudi Arabia. As a highly polluting sector, it may be part of CO2 abatement policy for the country. This paper presents a multi-criteria analysis to examine how two competing objectives affect the performance of the cement industry in Saudi Arabia. Namely, these criteria are profit and CO2 emissions. We examine the joint effects of economic costs and biases of the industry's senior management on decisions. Relevant decisions include fuel use, and investment in carbon capture and storage and more energy efficient kilns. The analysis adopts an operational model that we have developed for the industry, where 2015-2020 is the period of interest. It allows us to account for events that are not anticipated by the industry, such as the rise in energy prices that took place in 2016. Allowing imports and deeming the reduction of CO2 emissions as highly important, the industry would choose to import clinker and bypass the pyroprocessing stage in manufacturing; however, the country has broader local content and economic diversification requirements that make this infeasible. By not permitting imports to observe the actual operation of the industry at all levels, we find: In environmental regulations and depending on the CO2 price, behavioral considerations have a major impact on the decision-making process of cement manufacturers. For a low carbon price of up to 1 $/ton, the industry would have to care for emissions considerably in order to mitigate it. At 45 $/ton or above, behavioral considerations have a limited impact in the wake of profits. An example of a policy that could induce a reaction is one that consists of a carbon price of 27 $/ton. At that price, the industry's decision-makers do not have to weigh pollutants highly relative to the industry's profits. The policy would garner $4.9 billion in government revenue and reduce emissions by 181 million tons in the six-year period. The deal would generate $1.3 billion in profit in 2020, compared to $2.5 billion without government intervention. (C) 2017 The Authors. Published by Elsevier Ltd.

Green Expectations: Current Effects of Anticipated Carbon Pricing (2017) 🗎🗎

I report evidence that an anticipated strengthening of environmental policy increased emissions. I find that the breakdown of the U.S. Senate's 2010 climate effort generated positive excess returns in coal futures markets. This response appears to be driven by an increase in coal storage. The proposed legislation aimed to reduce U.S. greenhouse gas emissions after 2013, but the legislative process itself may have increased emissions by over 12 million tons of carbon dioxide leading up to April 2010.

Overlapping Environmental Policies and the Impact on Pollution (2017) 🗎🗎

This paper examines how increases in renewable generation interact with market-based environmental regulations to affect the emissions of both regulated and unregulated pollutants. Using a simple analytical model, I first demonstrate that, when combined with a cap-and-trade program, expansions in renewable generation have the potential to cause an undesirable outcomethey can increase emissions of unregulated pollutants. To explore whether this unintended increase in unregulated pollution could occur in practice, I look back at a NOX cap-and-trade program that was in place in the eastern United States from 2009 through 2014the EPA's Clean Air Interstate Rule. Using hourly generation and emissions data, I estimate how unregulated emissions of CO2 and SO2 would have been affected by adding new wind turbines and solar panels in the presence of a binding cap on NOX. I show that, once the interaction with the NOX cap is taken into consideration, renewable capacity additions would have offset much less CO2 than was previously thought. Moreover, I find that the renewable additions would have increased SO2 emissions.

Facility location and capacity acquisition under carbon tax and emissions limits: To centralize or to decentralize? (2017) 🗎🗎

We investigate the effect of environmental regulations in the form of a carbon tax and command-and-control legislation on plant capacity and location decisions of a firm. In this context, command-and-control involves a limit on the total emissions and penalties for any polluter exceeding this environmental limit, while carbon tax involves a variable cost for emissions. We also propose two novel policy options that should be considered by policy makers for transportation emissions: (1) a per unit per mile transportation penalty, and (2) a collective transportation emissions policy with a limit on total transportation emissions that encourages emission and cost efficient facility networks. We devise an exact algorithm to solve the arising discontinuous nonlinear integer problem. We also consider simplified versions of the problem to gain analytical insights on factors driving the solutions for the more accurate yet complex scenarios. We develop a realistic dataset from the auto industry gleaned from publicly available sources to highlight key results of the model. Through analysis of this representative data, we identify the environmental limits and penalties that would drive the company to compliance. We find that stricter regulations without high penalties would not assure compliance as the benefits of increased scale associated with a centralized plant frequently outweigh the regulatory penalties. At the strategic level, a production emissions tax does not encourage companies to reduce production emissions. However, high lump sum penalties with intermediate limits reduce both regional production and total transportation emissions. We find that for regional production emissions, while a command and control scheme with a high lump sum emissions penalty is effective in reducing emissions, a per unit carbon tax has no effect. Interestingly the opposite is true for total transportation emissions, where we observe that the per unit per mile transportation emissions tax is more effective than a command and control scheme. Finally, we also find that companies with low production pollution, low demand or high transportation costs should consider decentralization to comply with the environmental regulations.

Will China's "dash for gas" halt in the future? (2018) 🗎🗎

The consumption of natural gas in China increased by only 5.7 percent in 2015, a sharp drop from the previous year. This has resulted in aggressive restrictions on production and resale of long-term contracts. The question is: What will the supply of and demand for natural gas look like in China in the future? We estimate China's future natural gas demand based on unique panel data, and then investigate supply capacity through domestic production and international imports. Our analysis of supply and demand reveals that supply would be very likely to exceed demand in China in the future if there were no significant policy shocks. This is driven by the fact that the industrial sectors that consume natural gas the most grow much slower compared to earlier years. Possible policy shocks include price cut and encouraging the use of gas as a replacement for coal to reduce environmental woes. We also suggest that the plan for adding more supply capacity should base on a demand estimation that considers future economic growth, industrial structural shifts and environmental policy development.

Green fiscal reform in Sweden: Econometric assessment of the carbon and energy taxation scheme (2018) 🗎🗎

Empirical econometric assessment of environmental policy effectiveness is capable of demonstrating which tools have been helping to achieve the desired effect of reducing harmful emissions or stimulating technological change. This paper employs an econometric approach to analyse the effectiveness of energy and carbon taxes in Sweden, the country, which was one of the first to introduce a CO2 tax as well as an extensive environmental tax reform. The results showed that taken in isolation a CO2 tax was not sufficient to result in a significant change in CO2 emissions in Sweden, except in the case of petrol. On the other hand, energy taxes for coal and LPG have been statistically significantly effective. It was also clear that a technological innovation in the form of development of nuclear and hydro energy played a significant role in reducing CO2 emissions and higher oil price was also important in reducing national CO2 emissions in Sweden. At the same time, renewable energy (excluding hydro), a more recent innovation, has not been a statistically significant driver of CO2 emissions reduction, perhaps due to the fact that wind and solar play a much lesser role in Sweden at the moment. The net electricity imports from other countries have contributed positively towards reducing CO2 emissions in Sweden, while the use of coal and biomass tended to increase CO2 emissions. Compared to the ex-ante modelling results from the literature review, the findings confirm the role of environmental taxation as a viable policy instrument effective in reducing CO2 emissions in Sweden, although point towards a more nuanced picture. The paper raises important policy questions focused on the effectiveness of environmental policy tools.

Leakage in regional environmental policy: The case of the regional greenhouse gas initiative (2018) 🗎🗎

Subglobal and subnational greenhouse gas policies are often thought to be less effective than comprehensive policies as production and emissions of trade exposed industries may move from the regulated to the unregulated regions, a process referred to as "leakage". Leakage negates some emission reductions from the regulated regions. We use detailed electricity generation and transmission data to show that this is the case for the Regional Greenhouse Gas Initiative (RGGI), a CO2 cap-and-trade program for the electricity sector in select Northeastern U.S. states. More specifically, our results indicate that RGGI induced a reduction in coal-fired generation in RGGI states and an increase in NGCC generation in RGGI-surrounding regions. This finding suggests that the pollution haven hypothesis holds for state-level variation in environmental policy, even when compliance costs are low. (C) 2017 Elsevier Inc. All rights reserved.

General equilibrium economy-wide impacts of the increased energy taxes in Vietnam (2018) 🗎🗎

The Vietnamese Government is proposing a new tax levy on either petroleum products or coal, or both. That is, the Government expects to increase the current tax rates to the maximum levels set previously. In this instance, the tax on coal is intended to increase by 50%, while the tax on petroleum products is intended to increase by 33.33%. This study employs a computable general equilibrium model to assess the effects of these increases in taxes on the Vietnamese economy, focusing on energy, transportation, and the private sectors. Results show that an increase in tax on petroleum products will considerably affect the country with a reduction of real GDP by 1.99%. Exports and imports are also highly unfavorably affected. In this instance, the total emission level will be reduced by 7.12%. The increased tax on coal, however, will allow Vietnam to experience much lower un-favorable effects, while being able to cut a substantial amount of the emission level. For example, real GDP would only decline by 0.51%, while total emission level will be reduced by 10.25%. If these taxes are increased together, Vietnam will experience considerable contractions in the economy, but it is able to reduce a substantial emission level.

The erratic behaviour of the EU ETS on the path towards consolidation and price stability (2018) 🗎🗎

The Kyoto Protocol envisages the use of various instruments to achieve emission reduction targets, one of which is the European Union Emission Trading Scheme (EU ETS), the most important market worldwide for CO2 emission allowances. The volume of European Union Allowances traded represents over 45% of all the carbon dioxide generated by human activity within the continent. In its first two phases (2005-2012), the behaviour of the EU ETS was erratic, as a result of discretionary policies, an oversupply of allowances and reduced economic activity due to the global crisis. These factors caused excessively low prices that distorted the initial goals of achieving low-carbon solutions. From 2013, changes were made to the market regulation mechanisms in order to correct these structural deficiencies. Empirical analysis of daily prices in the two central phases of the market, following the pattern of ARCH and GARCH models, shows that the measures taken within the EU generated greater confidence and stability in the market and thus reduced volatility. Subsequent price behaviour, following a bullish path, has confirmed the success of the measures taken and their contribution to fulfilling emission reduction targets.

Industrial low carbon futures: A regional marginal abatement cost curve for Sao Paulo, Brazil (2018) 🗎🗎

Sub-national and regional greenhouse gas (GHG) mitigation policies are being stimulated by the Paris Agreement. Several low carbon studies have been conducted for important emitters such as California State in the US and Chinese provinces. At the same time, carbon mitigation studies have focused on the industrial sector, especially in developing countries. In comparison to the national scenario, the Sao Paulo state in Brazil shows a distinct emission profile. The industry in Sao Paulo is responsible for 14.7% of the total emissions, and this share increases to 31.5% considering energy indirect emissions. Therefore, Sao Paulo mitigation efforts depend on industry's leadership such as in other parts of the world. The present study has evaluated the Sao Paulo state's industry mitigation potential between 2014 and 2030 based on a Marginal Abatement Cost (MAC) curve. In contrast to previous MAC studies, the MAC-SP study has also considered cement related emissions released outside its jurisdictions but that are driven by industrial choices within its boundary. Nine out of seventeen technologies show a negative MAC value, and energy efficiency technologies yield the lowest cost with a weighted average value of -$122/metric ton of CO2. Considering only the territorial based approach, the Sao Paulo state's Industry would avoid 78.4 million metric ton of CO2 until 2030. Although emissions under Sao Paulo's responsibility increase 27%, if the consumption-based approach is adopted, the assessed mitigation potential enhances 83% and entails US$ 2.3 billion savings until 2030. In conclusion, the mitigation potential for Sao Paulo state's industry is sizeable and consumption-based strategies are worthwhile, especially when regional policies are considered. Results can assist in formulating climate change policies and innovative incentive mechanisms to maximize the regional mitigation potential. (C) 2018 Elsevier Ltd. All rights reserved.

Consumption-Based Accounting and the Trade-Carbon Emissions Nexus in Asia: A Heterogeneous, Common Factor Panel Analysis (2018) 🗎🗎

This paper considers a recently developed consumption-based carbon emissions database from which emissions calculations are made based on the domestic use of fossil fuels plus the embodied emissions from imports minus exports, to test directly for the importance of trade in national emissions. The People's Republic of China (PRC) alone is responsible for over half the global outflows of carbon via trade. The econometric estimations-which focused on a panel of 20 Asian countries-determined that: (i) trade flows were significant for consumption-based emissions but not for territory-based emissions; and (ii) exports and imports offset each other in that exports lower consumption-based emissions, whereas imports increase them. Hence, all countries should have both an interest and a responsibility to help lower the carbon intensity of energy in countries that are particularly important for global carbon transfers-the PRC and India.

On the current account - biofuels link in emerging and developing countries: do oil price fluctuations matter? (2018) 🗎🗎

Many developed countries promote the use of biofuels for environmental concerns, leading to a rise in the price of agricultural commodities utilized in their production. Such environmental policies have major effects on the economy of emerging and developing countries whose activity is highly dependent on agricultural commodities involved in biofuel production. This paper tackles this issue by examining the price impact of biofuels on the current account for a panel of 16 developing and emerging countries, and the potential nonlinear effect exerted by the price of oil on this relationship. Relying on the estimation of panel smooth-transition regression models, we show that positive shocks in the price of biofuels lead to a current-account improvement for agricultural commodity exporters (rasp. producers) only when the price of oil is below 45 (reap. 56) US dollars per barrel. When the price of oil exceeds these thresholds, the effect of fluctuations in the price of biofuels on the current account tends to weaken and become non significant. Under these conditions, our findings indicate that, for agricultural commodity exporters which are also oil importers, the current account is pulled by two opposite forces, making its overall reaction modest or even nil.

Environmental versus economic performance in the EU ETS from the point of view of policy makers: A statistical analysis based on copulas (2018) 🗎🗎

The European Union Emissions Trading System (EU ETS) was created with the aim of promoting reductions of greenhouse gas emissions in a cost-effective and economically efficient manner. In line with this objective, when making their decisions, policy makers should consider not only the CO2 reduction targets but also the influence of these pollution reduction goals on companies' economic performance. This paper analyses the relationship between the economic and environmental performance of a sample of Spanish companies involved in the EU ETS in order to provide more information to the institutions responsible for developing these policies. This relationship is considered from two perspectives: the first examines how a company's production affects the ratio of the level of emissions to allocated allowances (the EA ratio), while the second examines how the EA ratio affects company results. A statistical methodology based on copulas is used, which allows us to analyze the relationship between these variables without requiring the assumptions of joint normality and linearity, thus providing the study with greater flexibility and realism. Our results highlight the existence of three different periods that correspond to Phases I, II and III of the EU ETS. During Phase I (2005-2007), the relationship between the EA ratio and firms' production and profitability was weak and, in the case of production, not significant. In Phase II (2008-2012), the efficiency of the EU ETS was higher, the allocations were better adjusted to firms' activities, and firms with EA values close to 1 were the most productive and profitable. The same trend occurred in Phase III (2013-2015), where a significant reduction of CO2 emissions levels was observed but with higher EA values, especially in the Energy and Other Manufacturing sectors (including the Food, Textile, Leather, Footwear and Clothing, and Rubber and Paper industries). Therefore, although the environmental policy promulgated by the EU ETS is partially achieving its goal of reducing CO2 emissions, it is still necessary to encourage green investments in order to decrease the EA levels, which are too high to satisfy the European Union Allowances allocation policy. (C) 2017 Elsevier Ltd. All rights reserved.

Optimal carbon taxes for China and implications for power generation, welfare, and the environment (2018) 🗎🗎

China is expected to constitute about half of the world's emissions between 2010 and 2040. As concerns about climate change intensify, the Chinese government is poised to commit to a low carbon economy. These conditions make China a suitable case in which to study how emission policies impact on energy supply, welfare, and the environment. To achieve this purpose, we incorporate abatement technologies into the GTAP computable general equilibrium model and show that optimal taxes range between 0.03% for services and 2.02% for manufacturing. In most cases, simulated tax rates are by far higher than pollution taxes stipulated in the new Chinese environmental tax law. Furthermore, despite a decline in output of many sectors including the electricity sector, overall welfare gains exist from introducing carbon taxes. Moreover, these taxes reduce environmental pollution by approximately 62.5%. In general, carbon taxes are insufficient for mitigation in China, and due to a coal-dominant energy structure, implementing these taxes leads to a decline in power generation. Hence, the Chinese aggressive investment strategy for renewable electricity technologies as stipulated in its 13th Five-Year Plan is understandable.

Renewable energy subsidies versus carbon capture and sequestration support (2018) 🗎🗎

We propose an equilibrium model where final-goods production uses labor and energy, and energy production uses non-polluting Renewable Energy Sources (RES) and polluting fossil fuels. Our goal is to compare two alternative Green Tax Reforms (GTRs). In one of the GTRs, carbon tax revenues are used to support Carbon Capture and Sequestration (CCS) activities. In the other GTR, tax revenues are used to subsidize RES. The comparison between the two GTRs is focused on three indicators: output per worker, energy intensity and the ratio of renewables over non-renewables. Results show that, in theory, the GTR with the RES subsidy could benefit both the economy and the environment if resource substitution was strong enough. The GTR with CCS support necessarily decreases output since abatement only partially alleviates the tax burden. The empirical simulation indicates that, for most tax values, both GTRs imply an economic slowdown but benefit the environment. The GTR with RES subsidies appears to be preferable than the alternative one, especially for lower tax levels.

Determinants of oil price subsidies in oil and gas exporting countries (2018) 🗎🗎

This paper investigates the implicit subsidization of refined products in oil and gas exporting countries. Most of these countries, as well as some other countries (mostly developing countries, but one could argue that US gasoline prices do not account for external costs), distribute large subsidies. Subsidies that are offered for a long period, are not only inefficient, but also dangerous due to gradual increases in the energy demand. Low domestic prices have led to immense oil demand growth that cannot continue if these countries wish to continue exporting. Only very high price jumps can stop this development, but politically these price jumps are very costly, if not suicidal, for many governments. Indeed, we argue that the currently low oil prices not only harm oil and gas exporting countries, but also provide a unique opportunity to eliminate this costly subsidy policy at manageable political costs. This paper begins with theoretical, normative and positive explanations of low domestic energy prices, and then addresses how to phase out subsidies, again from a normative and positive perspective. Finally, we empirically address the obstacles that individual countries may face when attempting to eliminate subsidies by quantifying the factors (political, economic, and social) that influence the existing subsidies.

Support to renewable energy sources and carbon capture and sequestration: comparison of alternative green tax reforms (2018) 🗎🗎

We compare the economic and environmental effects of several specifications of a green tax reform (GTR) where tax revenues are used to support renewable energy sources (RESs) and carbon capture and sequestration (CCS) activities. With this aim, we propose an equilibrium model where final-goods production uses labour and energy, and energy production uses nonpolluting RES and polluting fossil fuels. The comparison is based on three key indicators: output per worker, energy intensity and the ratio of renewables over nonrenewables. We test five variations of the GTR in addition to the no-policy case. Results show that a GTR as the one we propose here never provides a double dividend. There are environmental benefits but at the expense of the economy. Additionally, for lower tax levels, prioritizing RES support has lower economic costs and potential environmental benefits. For higher tax levels, CCS support becomes more competitive.

ENVIRONMENTAL CONSUMPTION TAXES ON ANIMAL FOOD PRODUCTS TO MITIGATE GREENHOUSE GAS EMISSIONS FROM THE EUROPEAN UNION (2018) 🗎🗎

Livestock cause around 10% of total greenhouse gas (GHG) emissions in the European Union. Despite the large quantities, no economic policy is in place to reduce emissions from the sector. In this paper, we introduce consumption taxes on animal products in the European Union to reduce GHG emissions. Impacts are simulated using the CAPRI model, which was created to analyze the impacts of agricultural policy reforms within the EU. Tax levels of 16, 60 and 290 Euro per ton of GHG emissions are used in the estimations. Our results show that consumption taxes have small mitigation effects, up to 4.9% of total agricultural emissions from the EU-27, mainly due to inelastic demand. The main source of reductions is beef and France is the country where most reductions would take place, given high levels of production and consumption in the country, combined with a large demand elasticity of beef.

The behavioral effect of Pigovian regulation: Evidence from a field experiment (2018) 🗎🗎

Pigovian regulation provides monetary penalties/rewards to incentivize prosocial behavior, and may thereby trigger behavioral effects beyond a more standard response associated with a change in relative prices. This paper quantifies the magnitude of these behavioral effects using data from an experiment on real product choices together with a structural model of consumer behavior. First, we show that information about external effects (products' embodied carbon emissions) triggers voluntary substitution towards cleaner alternatives, and we estimate that this effect is equivalent to a change in relative prices of GBP30.69-165.15/tCO(2). Second, comparing a Pigovian intervention (GBP19/tCO(2)) with a neutrally-framed price change of the same magnitude, we find a negative behavioral effect associated with regulation. Compensating this bias would require increasing the Pigovian price signal by up to 48.06/tCO(2). Finally, based on a cross-product comparison, we show that the magnitude of behavioral effects declines with substitutability between clean and dirty product alternatives, a measure of effort to reduce emissions. (C) 2017 Elsevier Inc. All rights reserved.

Strategic technology policy as a supplement to renewable energy standards (2018) 🗎🗎

In many regions, renewable energy targets are a primary decarbonization policy. Most of the same jurisdictions also subsidize the manufacturing and/or deployment of renewable energy technologies, some being sufficiently aggressive as to engender WTO disputes. We consider a downstream energy-using product produced competitively but not traded across regions, such as electricity or transportation. A renewable energy technology is available, provided by a limited set of upstream suppliers who exercise market power. With multiple market failures (emissions externality and imperfect competition), renewable market share mandates as the binding climate policy, and international trade in equipment, the stage is set to examine rationales for green industrial policy. Subsidies may be provided down-stream to energy suppliers and/or upstream to technology suppliers; each has tradeoffs. Subsidies can offset underprovision of the renewable alternative by the upstream suppliers, but they allow dirty generation to expand as the portfolio standard becomes less costly to fulfill. Downstream subsidies raise all upstream profits and crowd out foreign emissions. Upstream subsidies increase domestic upstream market share but expand emissions globally. In our two-region model, strategic subsidies chosen noncooperatively can be optimal from a global perspective, if both regions value emissions at the global cost of carbon. But if the regions sufficiently undervalue global emissions, restricting the use of upstream subsidies can enhance welfare. (C) 2017 Published by Elsevier B.V.

Biomass supply contract pricing and environmental policy analysis: A simulation approach (2018) 🗎🗎

This paper proposes an agent-based simulation model to study the biomass supply contract pricing and policy making in the biofuel industry. In the proposed model, the agents include farmers and a biofuel producer. Farmers' decision-making is assumed to be profit driven, which is formulated as a mixed integer optimization model, and the biofuel producer's pricing decision is represented with a linear equation with an objective to maximize profits. A case study based on Iowa has been developed to analyze the interactions between the stakeholders and assist determination of the optimal pricing equation for the biofuel producer. Simulation results show that under such a pricing strategy, the biofuel producer can achieve higher profitability than using a fixed price. The impact of government environmental regulations on farmers' decision-making and biomass supply has also been analyzed, and managerial insights have been derived. (C) 2018 Elsevier Ltd. All rights reserved.

Inter-fuel substitution in European industry: A random utility approach on industrial heat demand (2018) 🗎🗎

As the majority of industrial emissions stems from heat generation, the choice of fuel is, next to energy efficiency, one of the tools to influence climate impact (and security of supply) in industrial energy use. At the same time, the choice of fuel is not only a matter of price but of the furnace, it is used in. Top-down models often struggle to include technological explicitness, which is especially important to represent the heterogeneous structure of industrial energy demand. In this paper, an approach to apply a discrete choice model to industrial high temperature energy demand is presented. The model's parameters are estimated based on observed fuel choices. The model exhibits an average coefficient of determination of 0.45 when compared to a constant fuel use from 2002 to 2013 in major countries of the European Union. Results suggest that energy carriers are perceived very differently by industrial consumers. (C) 2018 Elsevier Ltd. All rights reserved.

The importance of transnational impacts of climate change in a power market (2018) 🗎🗎

We contribute to the discussion on transnational impacts of climate change by analysing the potential cross border impacts climate change driven changes in the hydropower potential. We analyse this in the context of the Nordic countries where Norway and Sweden are likely to gain hydropower potential and Finland is likely to experience transnational impacts. We use an economic simulation model and a dynamic optimization model to study the impact of climate change to the production mix, the price of electricity, consumption of electricity and emissions from electricity production. We show that climate change might reduce prices through increased renewables supply, which decreases the profitability of power production. The changes in the inflow profile affect the hydropower profiles over the hydrological year such that the reduced inflow peak in the spring shifts the hydropower production from spring to autumn and winter. In addition the larger inflow increases the share of hydropower in production mix over the year. The emissions per consumed energy unit is going to be decreased because of the decreasing share of the thermal production in the system. However, increased hydropower production reduces prices which in turn increases the quantity demanded. This rebound effect somewhat dampens the emission reduction.

Pollution havens: international empirical evidence using a shadow price measure of climate policy stringency (2018) 🗎🗎

Given the ambiguous empirical results of previous research, this paper tests whether support for a climate policy-induced pollution haven effect and the pollution haven hypothesis can be found. Unlike the majority of previous studies, the analysis is based on international panel data and includes several methodological novelties: By arguing that trade flows of dirty goods to less dirty sectors may also be influenced by changes in policy stringency, trade information on primary, secondary, and tertiary sectors are included. In order to clearly differentiate between dirty sectors and sectors with high pollution abatement costs, separate measures for pollution intensity and policy stringency are implemented. For the former, two intensities, namely the sectors' carbon dioxide emission intensity and the emission relevant energy intensity, are used to identify dirty sectors. For the latter, an internationally comparable, sector-specific measure of climate policy stringency is derived by applying a shadow price approach. Potential endogeneity between climate policy stringency, trade openness and the trade balance is controlled for by employing a dynamic panel generalized method of moments estimator. The results provide evidence for a pollution haven effect that is also present for non-dirty sectors, i.e., a sector's net imports rise in general if the sector faces an increase in climate policy stringency. Moreover, a stronger pollution haven effect regarding carbon dioxide intensive and emission relevant energy-intensive sectors is revealed. However, no support for the stronger pollution haven hypothesis can be found.

Policy stringency under the European Union Emission trading system and its impact on technological change in the energy sector (2018) 🗎🗎

In this study, we use patent count data for overall Climate Change Mitigation Technologies, and for those related to energy production and distribution to evaluate the relationship between the sizable oversupply of European Union emissions Allowances and a policy shift marked by the transition from Phase I to Phase II under the European Union Emission Trading System, on the one hand, and on "green" patenting, on the other. According to our results, the expected negative impact of this oversupply on technological change seems to be confirmed. Thus, stakeholders take the actual supply of certificates into account when determining their innovative activity. In the same vein, they do so with respect to policy changes related to greater stringency, which generated a sizeable increase in patenting activity when controlling for other economic factors. Our results suggest that a critical evaluation of emission caps and allowances distribution must be undertaken.

Emission control under private port operator duopoly (2018) 🗎🗎

Recent trends in regulating maritime vessel emissions have negative effects on the competitiveness of many ports as regulations increase costs for shipping operators calling the ports. This paper develops analytical models to examine the emission standards set by governments for ports in their jurisdictions. Given the emission standards set by governments, which affects fuel cost experienced by shipping operators, ports determine charges for shipping operators. Unilateral, bilateral, and single-country regulation cases are investigated. Specifically, our analysis focuses on how increase in the maximum reservation price of shipping operators, port capacity, and environmental damage costs of ports affect optimal emission standards.

The US biofuel mandate as a substitute for carbon cap-and-trade (2018) 🗎🗎

Environmental economists might recommend a cap-and-trade program as a good way to lower emissions of greenhouse gases (GHGs), but US carbon cap-and-trade legislation was proposed and failed to become law. Instead, the biofuel use mandate is the primary existing GHG reduction program in the United States. The mandate effectively requires a rising amount of GHG abatement each year, but allows regulated parties to buy and sell credits to meet annual obligations. Although many aspects of the biofuel mandate look similar to a cap-and-trade program, there are additional requirements, such as feedstock eligibility limitations and waivers. The existence of the mandates is presumably conditional on all the legal requirements, but these conditions represent a departure from a strict GHG cap-and-trade program. We estimate GHG abatement costs of the mandate and compare them to a hypothetical cap-and-trade program targeting vehicle fuels. The mandate abatement cost is found to be higher than a hypothetical GHG cap-and-trade. Our results show that the RFS might be judged as a feasible substitute for a cap-and-trade regime that can deliver GHG reductions, but at a higher cost reflecting its multiple objectives.

Evaluation of the alternative effects of the indium resource tax on tariffs: An endogenous perspective (2018) 🗎🗎

China is currently facing a severe challenge to indium resource security, mainly due to a lack of foresight regarding current policy decisions. This paper constructed a modified user cost model to calculate the indium resource tax and then constructed a transformed Lerner index and an SMR model based on the seller's perspective to calculate the value of market power. Then, it embedded those parameters into a tax transfer model to evaluate the alternative effects of the indium resource tax on tariffs. As we observed, the theoretical tax rate for the indium resource tax fluctuated between 0.67% and 15.53%, and the alternative tax rate for the indium resource tax ranged from 0.32% to 13.03%. By evaluating the alternative effects of the resource tax on tariffs from an endogenous perspective, it can be seen that market powers of the indium processing enterprise and export enterprise, the supply price elasticity of indium processing enterprise and the demand price elasticity of indium export enterprise will have a significant impact on the effect of substituting tariffs with a resource tax. Therefore, the Chinese government should accelerate the vertical integration of the indium resource industry and enhance the market power and supply elasticity of export enterprises through policy measures. Taking the resource tax as the core means of indium resource management, strategies to prevent international disputes concerning the selection of raw materials for trade are discussed, and new analytical insights and directions are provided, which can be applied to similar issues for other metals.

Decomposition method for oligopolistic competitive models with common environmental regulation (2018) 🗎🗎

Global climate change has encouraged international and regional adoption of environmental policies aiming at reducing the generation of greenhouse gas emissions. Europe has taken the leadership in environmental regulations by introducing the European-Union Emissions Trading System (EU-ETS) in 2005 and other policies to mitigate carbon emissions and increase the efficiency of production processes. These environmental policies have significantly affected the production choices of the European energy and industrial sectors. In this paper, we consider a market where a set of players (firms) produce different commodities under a common environmental regulation that limits their emissions. Due to these environmental restrictions, the problem is treated as a generalized non-cooperative game where players have joint (environmental) constraints caused by the common and compulsory emission regulation. The problem is to find a natural mechanism for attaining the corresponding generalized equilibrium state. We suggest a share allocation method, which yields a suitable decomposition type procedure and replaces the initial problem with a sequence of non-cooperative games on Cartesian product sets. We also show that its implementation can be simplified essentially after the application of a regularized penalty method. In the case study, we take inspiration from the EU-ETS and we introduce an environmental regulation that restricts the carbon emissions of firms representing the energy, cement, and steel sectors respectively in Germany, France, Italy, and Spain. Our results confirm the important role played by energy sector in reducing carbon emissions.

Potential impacts of the Emissions Reduction Fund on the Australian economy (2018) 🗎🗎

This paper examines the impacts of the Emissions Reduction Fund on the Australian economy. The GTAP-E model has been extended to allocate the subsidy directly to each eligible sector. The simulation of the subsidy policy has been supplemented by introducing an improvement of energy efficiency to non-agricultural sectors and of resource efficiency by using endowment factors in the agricultural sector. Results indicate that, with the current budget of A$2.55 billion, or US$1.86 billion (Scenario 1), Australia can only achieve the minimum cumulative emissions reduction target of 225 MtCO(2)-e during 2015-20. Australia needs a budget of US$2.08 billion (Scenario 2) to achieve the maximum cumulative emissions reduction target of 279 MtCO(2)-e. In both scenarios, the agricultural sector receives the highest payment from the Australian Federal Government under the subsidy programme, followed by the electricity generation sector. Under the scheme, Australia experiences only a mild contraction in the economy, with a reduction of real GDP by 037% and 0.55% in the two scenarios, respectively. (C) 2018 Elsevier B.V. All rights reserved.

How China's current carbon trading policy affects carbon price? An investigation of the Shanghai Emission Trading Scheme pilot (2018) 🗎🗎

To better establish a unified carbon market in China, this study evaluates the effect of current carbon trading policy and further investigates the relationship between such policy that is published during the second phase of Shanghai Environment and Energy Exchange (SEEE) and Shanghai Emission Allowance (SHEA) price. We aim to analyze whether these policies can improve the operation efficiency of current carbon market. By the Mean Reversion Test, Cox-Ingersoll-Ross (CIR) Model, and Event Study Method, we first analyze the potential price discovery function of SHEA products, thereby describing the transmission channel of current policy to SHEA price. Then we examine the effect of carbon policies published in different periods on their corresponding SHEA price. By the Auto-correlation Test and CIR simulation, we find that 3/4 of all auto-correlation values are less than 0 after Apr. 2017, and the minimum cumulative error is 31.3792 under the supply and demand channel. These findings imply that SHEA price has the discovery function at the middle and end of trading period, and the current policy affects SHEA price through its effect on the fundamentals of supply and demand. Further, more than 60% of all r-values (r-value that reflects the response of price to policy) are less than 1, which implies that the published policy will improves future SHEA price. Accordingly, we argue that SEEE belongs to a policy-oriented market, and the change of carbon price is closely related to emission allocation policies. In this case, China's government should further push forward the smooth operation of current carbon market by the aid of incentive policy in the coming period. (c) 2018 Elsevier Ltd. All rights reserved.

Sustainable supply chain collaboration with outsourcing pollutant-reduction service in power industry (2018) 🗎🗎

In developing countries, coal power plants still play a major role in the power sector and they are considered as a major emission source of air pollution. Strict regulations have compelled the coal power plants to improve environmental performance by reducing carbon emissions and the emission of pollutants. However, due to cost disadvantages, the coal power plants often lack motivation to internalize environmental externalities through investing in green technology. This situation raises a question: is there any alternative to reduce pollutants in operations economically? With a focus on service supply as well as a consideration of government policies, this paper develops a model to investigate the opportunity of outsourcing a pollutant-reduction service to meet the environmental constraint. The service supply chain consists of a coal power plant (end user) and a pollutant-reduction service provider, with the former outsourcing the service to the latter. We study the policy for improving the profit of this service supply chain whereas the benefit allotment is adjusted through outsourcing price negotiation between the two partners. The results show that the green service outsourcing price is interrelated with the government incentive policy which defines the shares of the two partners. Our key contribution lies in integrating the complex factors affecting the supply chain collaboration such as green service, financial feasibility, environmental constraint, government policies, outsourcing price negotiation, and profit sharing. Our research findings have the following implications; considering environmental externalities, the government should motivate the collaboration between supply chain partners; the economic scale of output and sales price subsidy of electricity generation are the primary factors affecting the price of outsourcing green service and, consequently, the allotment of supply chain profits. The study results indicate the collaboration is potentially effective in improving environmental performance. (C) 2018 Elsevier Ltd. All rights reserved.

Consumption-based accounting and the trade-carbon emissions nexus (2018) 🗎🗎

This paper considers a recently developed consumption-based carbon emissions database from which emissions calculations are made based on the domestic use of fossil fuels plus the embodied emissions from imports minus exports, to test directly for the importance of trade in national emissions. Comparing such consumption-based emissions data to conventionally-measured territory-based emissions data produces several useful conclusions. For example, most countries are net importers of carbon emissions their consumption-based emissions are higher than their territory-based emissions. Also, while low and high income countries tend to have the largest ratios (of consumption-based emissions to territory-based emissions), the majority of middle-income countries have ratios greater than one as well. Furthermore, China alone is responsible for over half the global outflows of carbon via trade. The econometric estimations which were robust across income levels determined that: (i) trade was significant for consumption-based emissions but not for territory-based emissions; (ii) exports and imports offset each other so that exports lower consumption-based emissions, whereas imports increase them; and (iii) the fossil fuel content of a country's energy mix is more important (likely significantly so) for territory-based emissions than for consumption-based emissions; and (iv) domestic fossil fuel prices (oil, gasoline) had a negative impact on territory-based emissions but were insignificant for consumption-based emissions. Hence, there is a wedge between (i) the emissions a country is responsible for consumption-based emissions and (ii) the emissions that a country's domestic policies affect territory-based emissions. So, countries should have both an interest and a responsibility to help lower the carbon intensity of energy in countries that are particularly important for global carbon transfers China and India. (C) 2017 Elsevier B.V. All rights reserved.

Emissions tax in Iran: Incorporating pollution disutility in a welfare analysis (2018) 🗎🗎

The emission of carbon dioxide per unit of GDP for Iran is more than 30% higher than what is available around the world. The present study aims to implement a dynamic Computable General Equilibrium model to evaluate the impact of pollutants (NOx, SO2, CO, CO2, CH4 and N2O) emissions tax on their emissions and households' welfare. In welfare analysis, consumer utility maximization is examined based on both standard utility and the pollution incorporated utility functions. Two levels of emission tax known as medium and high emission tax were evaluated. In medium emission tax scenario, tax rates are equal to medium estimates of damage costs while the rates are twice more than the medium estimates in high emission tax. In general, the simulation results indicated a significant effect of emission tax on the pollutant emissions rather than output contraction. However, the effect of taxing on the emission of pollutants increased significantly under incorporating pollution disutility, compared to standard utility alternative, leading to higher welfare and lower emissions. In addition, the emissions of all pollutants in high tax scenario except for CH4 and N2O decreased by at least 20%, compared with their current level at the end of the simulation horizon. Further, the distribution of welfare gains improved under the pollution incorporated option, compared to the standard one as it favored low income and rural groups. (C) 2018 Elsevier Ltd. All rights reserved.

Socially optimal deployment strategy and incentive policy for solar photovoltaic community microgrid: A case of China (2018) 🗎🗎

Aiming to meet the increasingly diversified demand of electricity and abate emissions of electricity sector, the solar photovoltaic-powered community microgrid (SPCM) is encouraged in China. Based on an understanding of the distributed solar radiation intensity (SRI) in China, this paper explored the socially optimal deployment strategies of SPCM. And by formulating a leader-follower Stackelberg game, we investigated the role that emission permits trade policy can play in inducing the choice of SPCM. The empirical results show that not all the areas in China are suitable for the promotion of SPCM. And the social emissions concern (epsilon) has a big impact on the socially optimal deployment strategy of SPCM. Two factors determine whether the SPCM is inducible in a specific area: the located SRI and the incentive policy. And for a specific area, resident makes the choice based on whether the SPCM could be profitable. The results also demonstrate that a high price of CERs can achieve the effect of feed-in tariff policy in inducing SPCM, and emission permits trade policy as a market incentive mechanism can also internalize the external costs of CO2 emissions.

Efficiency and allocation of emission allowances and energy consumption over more sustainable European economies (2018) 🗎🗎

Efficient use of energy, reduction in fossil fuel dependence and control of CO2 emissions are all fundamental to development of a sustainable economy. Competitiveness in energy use saves imports of oil and gas, increases gross domestic product and creates new jobs in the renewable energy and energy efficiency sectors. This study identifies the more or less competitive European Union member states in terms of sustainable growth, using Data Envelopment Analysis (DEA) model, and proposes new allocations of country greenhouse gas limits and energy consumption, using a Zero Sum Gains DEA model. The analysis of European countries fills a gap in the existing literature and contributes to the discussion on the 2020 2030 European strategy, proposing an efficiency-based indicator which measures country performance in terms of economic, social and environmental factors: GDP represents the economic factor, population represents the social factor, and emissions, final and renewable energy consumption are the environmental factors. The numerical results show that the initial allocations are inefficient. Applying the modelled reallocation, the most efficient countries are "rewarded" by potential increases in emission and energy consumption, while the least efficient countries must bring about decreases to achieve full efficiency. (C) 2018 Elsevier Ltd. All rights reserved.

Emission charge and liner shipping network configuration - An economic investigation of the Asia-Europe route (2018) 🗎🗎

This paper models shipping lines' operational costs and CO2 emissions under alternative geographic network configurations when an emission charge is imposed on operations from Asia to Europe. Our modeling results suggest that shipping firms' network configuration is influenced by emission charge, fuel price, port loading and unloading cost, and demand pattern of cargo transport across different markets. Total emission will be reduced by an EU emission charge scheme. However, if the charge is above a threshold, carriers will reconfigure shipping networks to minimize their costs including emission charge payments. This will offset part of the emission reduction achieved by the emission scheme. As a result, a higher charge does not always lead to a higher emission reduction. The performance of major ports along the Asia-Europe routes will be influenced in different ways, leading to conflicting views from regional governments. These findings reveal possible regulation costs and market distortions associated with regional emission systems, and highlight the complex effects of international environmental policies when market dynamics are considered.

The effect of governmental policies of carbon taxes and energy-saving subsidies on enterprise decisions in a two-echelon Supply chain (2018) 🗎🗎

Many countries have implemented carbon taxes to reduce carbon emissions, and provided subsidies for products that consume less energy. These governmental policies force manufacturing enterprises to emit less carbon during production and develop more energy-saving products. To examine how carbon taxes and energy-saving products subsidies affect enterprises' operational decisions, this study considers a manufacturer retailer channel in which the manufacturer has the options to design a product to emit less carbon during production and use less energy when the product is consumed by customers. It is showed that governments' energy-saving products subsidies stimulate reduction of carbon emissions and energy consumption, but this is not always true for carbon taxes, government should levy carbon taxes against manufacturers according to their pollution levels. Both carbon tax and subsidy policies can promote energy conservation and emission reduction if the initial carbon emission level of a manufacturer is low, but they have different promotional effects. Finally, in order to ensure the supply chain members cooperate and realise larger energy savings and emissions reductions, we propose a carbon cost-sharing contract. (C) 2018 Published by Elsevier Ltd.

Carbon pricing with an output subsidy under imperfect competition: The case of Alberta's restructured electricity market (2018) 🗎🗎

In this paper, we examine the use of carbon pricing and an output-based subsidy in a market with imperfect competition. We consider a carbon pricing policy in Alberta's electricity market as a case study. This policy consists of two phases. In the first phase, the carbon price is increased with the output subsidy being based on a fraction of facility-level emission intensity. In the second phase, the output subsidy is altered to be uniform across assets and based on the emissions intensity of an efficient natural gas asset. Using a model of oligopoly competition, we simulate the short-run impacts of the two phases on electricity prices, emissions, and unit and firm-level profitability. We find that the mechanisms by which electricity prices and emissions change in response to carbon pricing differ depending on whether the market is perfectly competitive or oligopolistic. We demonstrate that by differentiating the effective carbon price across technologies, changing the basis of the output subsidy has substantially larger price and emissions effects than increasing the carbon price for all generators. The estimated effects of carbon pricing vary as the firms' generation portfolios change. (C) 2018 Elsevier B.V. All rights reserved.

Assessment of carbon leakage by channels: An approach combining CGE model and decomposition analysis (2018) 🗎🗎

As carbon leakage occurs through the channels of competitiveness, demand and energy, a detailed study of leakage channels in a unified framework is clearly warranted. This paper illustrates these three channels by a simplified theoretical general equilibrium model. It confirms the common concern that the competitiveness and demand channels as a whole cause relocation of energy-intensive production, and the energy channel leads to increased carbon-intensity in other regions, resulting in positive leakage. We propose an approach, combining computable general equilibrium (CGE) model and decomposition analysis, to decompose overall carbon leakage into three channels. The numerical simulation using the multi-region CGE model in China to study the carbon leakage from Hubei Pilot ETS is presented. The results show that (a) the competitiveness channel is the main source of carbon leakage, while the demand channel is smallest one; (b) carbon leakage rate through the energy channel is modest due to limited energy price fall. Policy implications of this study are also discussed. (C) 2018 Elsevier B.V. All rights reserved.

Carbon policy for the United States, China and Nigeria: An estimated dynamic stochastic general equilibrium model (2019) 🗎🗎

In recent years there has been significant interest in the connection between energy policy and carbon-emitting factors, with significant emphasis on fixing policy gaps. This paper explores the impact of energy policy in curbing the effect of carbon emission in the United States, China and Nigeria. It offers an empirical insight into the effect of energy policy on carbon emission disclosure of the selected countries' economies. Since understanding future decisions on energy use is uncertain, the study develops, interacts and simulates a simple model for analysing the nexus between the energy sector and environmental policy within the uncertain business environment. The omission in the majority of available literature is that it is unclear if the precise reduction in carbon emission is consistent with the carbon tax levied on economic agents. At best, the evidence gathered points to a fresh impetus on energy policy to accommodate business cycles, even if carbon emission must be mitigated. This study, therefore, analyses the subjective behaviour of an economic agent in the context of carbon emission and the depreciating quality of life. The empirical evidence is based on the Dynamic Stochastic General Equilibrium (DSGE) model. The paper submits that policy direction towards a carbon-free environment, when properly channelled, would impact positively on decarbonisation. Simulation conducted shows that pollution is highly connected with macroeconomic fluctuation, and environmental policy can only be effective when both variables are considered in the context of the DSGE framework. Thus, the study strongly recommends broader carbon tax reform and a proactive monetary stance to mitigate carbon emission and motivate new renewable energy investors. (C) 2019 Elsevier B.V. All rights reserved.

Decoupling the EU ETS from subsidized renewables and other demand side effects: lessons from the impact of the EU ETS on CO2 emissions in the German electricity sector (2019) 🗎🗎

This paper analyzes the impact of the EU ETS on CO2 reduction in the German electricity sector. We find an ETS-induced emission abatement which is not exceeding 6% of total emissions with a maximum already in 2010. Thereafter the ETS has not induced additional reductions. This outcome corresponds to the recent debate about sub-optimal performance of the EU ETS caused by excessive allowances. Following up on this we develop a unilateral flexible cap to eliminate demand side effects which lead to excessive allowances. The unilateral flexible cap is based on emission intensities. Using the works of Newell and Pizer (2008); Sue Wing et al. (2009) we prove that an intensity-based emission cap is advantageous in the German electricity sector when compared to an absolute cap. An ex-post analysis shows that the amount of excessive allowances resulting from the economic crisis during the second trading period could have been significantly lowered with a unilateral flexible cap. This approach also decouples the EU ETS from a simultaneous promotion of renewable energy.

Regional carbon policies in an interconnected power system: How expanded coverage could exacerbate emission leakage (2019) 🗎🗎

Interconnected regional electricity markets are often subject to asymmetric carbon policies with partial coverage for CO2 emissions. While the resulting problem of carbon leakage has been well studied, its mitigation has received relatively less attention. We devise a proactive carbon policy via a bi-level modelling approach by considering the impact of an emission cap that limits the cost of damage from a regional power market. In particular, a welfare-maximising policymaker sets the cap when facing profit-maximising producers and the damage costs from their emissions at two nodes. A partial-coverage policy could degrade maximised social welfare and increase total regional CO2 emissions with potential for carbon leakage due to a higher nodal price difference. A modified carbon policy that considers CO2 emissions from both nodes tightens the cap, which increases maximised social welfare and decreases total CO2 emissions vis-a-vis the partial-coverage policy, albeit at the cost of greater scope for carbon leakage as it causes nodal prices to diverge. As a compromise, an import-coverage policy, implemented by California, that counts only domestic and imported CO2 emissions could alleviate carbon leakage at the cost of lower maximised social welfare with higher total emissions vis-a-vis the modified-coverage policy.

Analysis of carbon tax efficiency in energy industries of selected EU countries (2019) 🗎🗎

A carbon tax is one of economic policy instruments of environmental protection supposed to contribute to the reduction of greenhouse gas (GHG) emissions. A functional carbon tax aims at incorporating costs for elimination of environmental harm into the pricing decisions. In terms of global climate change, the carbon tax is usually imposed on the production, distribution or consumption of carbon-content fossil fuels. The main aim of the study is to evaluate the carbon tax environmental effectiveness in the energy industries of selected EU countries, namely Sweden, Finland, Denmark, Ireland and Slovenia. To achieve the principal research objective, the multiple panel regression method for the selected variables was used, the synergy of other environmental policy tools being taken into account. Control variables employed were emission allowance price, household final consumption expenditure, corporate investments, solid fuel consumption and renewable energy consumption. The analysis results suggest that the carbon tax in the energy industry is environmentally efficient, an increased tax rate allowing to reduce GHG production, which is statistically significantly affected by the consumption of fossil fuels. Based on the estimated partial regression coefficient (-0.01158), raising the carbon tax by one euro per tonne can cut annual per capita emissions by 11.58 kg.

How global climate policy could affect competitiveness (2019) 🗎🗎

A global uniform carbon price would be economically efficient and at the same time avoid 'carbon-leakage'. Still, it will affect the competitiveness of specific industries, economic activity and employment across countries. This paper assesses short-term economic shocks following the introduction of a global carbon price that would be in line with the Paris Agreement. Based on the World Input-Output Database(WIOD), we trace the carbon content of final output through global supply chains. This allows us to estimate how prices of the final output would react to the introduction of a global carbon price. We find that impacts on industrial competitiveness are highly heterogeneous across regions and economic sectors. The competitive position of Brazil, Japan, the USA and advanced economies of the EU is likely to improve, whereas industries and labor markets in newly industrializing Asian economies as well as Eastern Europe are likely to experience substantial adverse impacts. (C) 2019 The Authors. Published by Elsevier B.V.

The influence of the fossil fuel and emission-intensive industries on the stringency of mitigation policies: Evidence from the OECD countries and Brazil, Russia, India, Indonesia, China and South Africa (2019) 🗎🗎

The article assesses the effects of different industrial sectors on the design of market-based policies that mitigate climate change. It claims that the emission-intensive and fossil fuel industries, especially those exposed to trade, have a negative impact on the stringency of domestic market-based mitigation policies, namely, carbon taxes and Emission Trading Systems (ETS). To address endogeneity between industrial and policy outputs, the empirical analysis resorts to a nontraditional instrumental variable method constructing instruments with heteroskedastic errors in the data. With a dataset that covers 34 countries from 1990 to 2015, the analysis shows that there is a negative and statistically significant association between these industries and policy stringency, albeit in a differentiated way. Whereas the upstream fossil fuel industries have a negative relationship with carbon taxes, the power industry was only negatively associated with ETS. Emission-intensive manufacturers and the downstream fossil fuels industry have a negative effect on both policies. The design and practical applications of each policy explain the disparities; although ETS regulate larger emission-intensive installations such as power plants, carbon taxes tend to impose tariffs on activities that are not necessarily emission-intensive, such as oil extraction or specific fuels. The results, robust to different estimation methods, support that larger industrial outputs are significantly associated with less stringent mitigation policies.

How OECD countries subsidize oil and natural gas producers and modeling the consequences: A review (2019) 🗎🗎

Since fossil fuel subsidies entail significant economic, fiscal, social and environmental costs, more and more attention is being paid to phasing out fossil fuel subsidies. The OECD has recently completed a report quantifying the amount of both producer and consumer subsidies for their member countries, and some work has been implemented on analyzing the effects of consumer subsidy removal. However, there is hardly any investigation of the consequences of producer subsidies. In this paper, we focus on oil and gas producer subsidies of OECD countries and their effects. First, we describe the transfer mechanisms indicated by the OECD report for producer subsidies. In order to recommend models to analyze the influence of removing producer subsidies, we review upstream oil and gas models and provide a taxonomy for them. From them we recommend the most appropriate models for each type of producer subsidy to model upstream decision making. Our contribution in this paper is to categorize the upstream models we have found, compare their main features, as well as recommending best in class models for analyzing the effects of each type of upstream producer subsidy.

A sector-wide economic and environmental analysis on bioenergy production and emission consequences (2019) 🗎🗎

Mining and using depletable fossil fuel usually result in severe environmental problem such as climate change in the global scale and acid rain in the regional level. To improve sustainable development, it is important to substitute fossil fuel with renewable and clean energy sources. In this study we employ a partial equilibrium, price endogenous mathematical programming model to analyze how bioenergy development in Taiwan can (1) enhance domestic energy production, (2) reduce the carbon dioxide (CO2) and sulfur dioxide (SO2) emissions, and (3) protect the environment. The results show that the ethanol expands with an increase in gasoline price, but SO2 emission reduction would shrink because of a reduction in renewable electricity generation. Conversely, up to 10.4% of Taiwan's annual SO2 emission can be reduced in the face of higher coal and emission prices. A tradeoff between CO2 and SO2 emission reductions is perceived during the switch of production of liquid and nonliquid bioenergy. Policy implications such as technology selection, market operation, and government subsidy are also discussed.

A Vehicle Routing Optimization Problem for Cold Chain Logistics Considering Customer Satisfaction and Carbon Emissions (2019) 🗎🗎

Under fierce market competition and the demand for low-carbon economy, cold chain logistics companies have to pay attention to customer satisfaction and carbon emissions for better development. In order to simultaneously consider cost, customer satisfaction, and carbon emissions in the cold chain logistics path optimization problem, based on the idea of cost-benefit, this paper proposes a comprehensive cold chain vehicle routing problem optimization model with the objective function of minimizing the cost of unit satisfied customer. For customer satisfaction, this paper uses the punctuality of delivery as the evaluation standard. For carbon emissions, this paper introduces the carbon trading mechanism to calculate carbon emissions costs. An actual case data is used with a cycle evolutionary genetic algorithm to carry out computational experiments in the model. First, the effectiveness of the algorithm and model were verified by a numerical comparison experiment. The optimization results of the model show that increasing the total cost by a small amount can greatly improve average customer satisfaction, thereby obtaining a highly cost-effective solution. Second, the impact of carbon price on total costs, carbon emissions, and average customer satisfaction have also been numerically analyzed. The experimental results show that as carbon price increases, there are two opposite trends in total costs, depending on whether carbon quota is sufficient. Increasing carbon price within a certain range can effectively reduce carbon emissions, but at the same time it will reduce average customer satisfaction to a certain extent; there is a trade-off between carbon emissions and customer satisfaction. This model enriches the optimization research of cold chain logistics distribution, and the study results complement the impact research of carbon price on carbon emissions and customer satisfaction. Finally, some practical managerial implications for enterprises and government are offered.

Green Procurement Decisions with Carbon Leakage by Global Suppliers and Order Quantities under Different Carbon Tax (2019) 🗎🗎

Manufactures have been pressed to reduce greenhouse gas (GHG) emissions by environmental regulations and policies. Towards to reduction of GHG emissions, a carbon tax has been already introduced in 40 countries. Owing to different carbon prices among countries, there are potential risks of carbon leakage, where manufacturers transfer production operations to the countries with lower taxes to pursue lower costs. Moreover, procurement costs and GHG emissions vary by country because of economic conditions and electric energy mixes. Therefore, total GHG emissions could be globally reduced if manufactures relocate their production bases or switch suppliers in the country with lower GHG emission levels. This study proposes a green procurement decision for the supplier selection and the order quantity for minimizing GHG emission and costs considering the different carbon taxes in different countries. First, a bill of materials for each part is constructed through the life cycle inventory database with the Asian international input/output tables for a case study. Second, a green procurement decision considering the different carbon prices is formulated using integer programming. Finally, the results, including carbon leakage, are analyzed from the viewpoint of manufacturers, governments, and global perspectives.

The impact of phasing out fossil fuel subsidies on the low-carbon transition (2019) 🗎🗎

There is growing consensus on the fact that fossil fuel subsidies provided by governments in high-income countries represent a misalignment on emissions' reduction with the global climate agenda. In addition, a discussion emerged on the negative socio-economic and environmental externalities associated with fossil fuel subsidies. Nevertheless, pathways for phasing out fossil fuel subsidies in high income countries and their implications on the low-carbon transition have not yet been assessed. With the aim to narrow this knowledge gap, we extend the EIRIN Stock-Flow Consistent behavioral model to study the implications on sustainable development of the gradual phasing out of fossil fuels subsidies, whose revenues could be used by the government to subsidize energy investments in green capital (e.g. solar panels), either via fiscal policies or green bonds. We assess the effects on green growth, employment, credit and bonds market, as well as the distributive effects across heterogeneous households and sectors. A smooth phasing out of fossil fuels subsidies contributes to improve macroeconomic performance, to decrease inequality and helps the government to find fiscal space to support stable renewable energy policies. Renewable energy subsidies contribute to foster the low-carbon transition but could imply distributive effects, depending on the way in which they are implemented.

How the removal of producer subsidies influences oil and gas extraction: A case study in the Gulf of Mexico (2019) 🗎🗎

Since producer subsides can entail significant economic, fiscal, social and environmental costs, governments have been increasingly interested in removing them. Although many studies have been done on reducing consumer subsidies, subsidies to fossil fuel production are rarely discussed by scholars. This paper seeks to fill this void by developing an economic optimization model for oil and gas extraction to analyze the effects of producer subsidy removal. We forecast field-specific costs for exploration, development and production through constructing functions for the number of wells drilled and producing wells, production and economic limits. Various scenarios of phasing out producer subsidies in U.S. federal and state regulation on optimal production using field data from the Gulf of Mexico are simulated, including removing royalty relief, amortization of geological and geophysical costs, and percentage depletion. The results show that removal of producer subsidies reduces the optimal production rate and investors' net present value and increases government revenue, but the total effect is a cost of net social benefits. Changes in both the discount rate and oil price have positive effects on optimal production, but they exert opposite effects on producer benefits. Our research is helpful for policy-makers to regulate an efficient subsidy removal path. (C) 2018 Elsevier Ltd. All rights reserved.

The Impact of Energy De-Subsidization Policy in 2030: A Dynamic CGE Model in China (2019) 🗎🗎

The issues of energy shortage and environmental pollution caused by energy subsidies are more serious in a massive energy-consuming country like China. Since the Group of 20 summit meeting on September 4, 2016, government leaders have confirmed that they will phase out inefficient fossil fuel subsidies. In this paper, we construct a computable general equilibrium model to analyze the impact of different de-subsidization policies based on possible reduction targets, mitigation routes, and reform periods. The results show that a nonlinear tendency in gross domestic product will emerge with the increasing intensity of de-subsidization targets. Moreover, there is a general macroeconomic recession both in output and consumption, where the prices have generally increased. The results also show that various mitigation routes of de-subsidization policy are slightly significant economically. However, the total removal of energy subsidy in one year will obtain an opposite conclusion with better social welfare and gross domestic product, but more carbon emissions and energy consumption. Overall, a medium target (50-90%) with an average reduction during 2010-2030 could be more suitable for China.

Carbon footprint accounts of Pakistan: an input-output life cycle assessment model (2019) 🗎🗎

The Paris agreement (2015) seems a significant achievement towards a global mitigation policy to climate change. However, implementing the promised Intended Nationally Determined Contribution (INDC) targets by the participating countries has become a real challenge. In this aspect, the input-output life cycle assessment (IO-LCA) model provides an important assessment mechanism to design suitable abatement policies limiting the rising greenhouse gas (GHG) emissions. The present paper develops an IO-LCA model for Pakistan and estimates all the direct and indirect GHG emissions caused by all the production activities during all the stages of production. This task is achieved in three phases. In phase 1, the Pakistan input-output table (IOT) is constructed. In phase 2, the GHG environmental satellite accounts are created for each sector in the economy. In phase 3, the GHG emissions are linked to different categories of final demand.

Modeling Latent Carbon Emission Prices for Japan: Theory and Practice (2019) 🗎🗎

Climate change and global warming are significantly affected by carbon emissions that arise from the burning of fossil fuels, specifically coal, oil, and gas. Accurate prices are essential for the purposes of measuring, capturing, storing, and trading in carbon emissions at regional, national, and international levels, especially as carbon emissions can be taxed appropriately when the price is known and widely accepted. This paper uses a novel Capital (K), Labor (L), Energy (E) and Materials (M) (or KLEM) production function approach to calculate the latent carbon emission prices, where carbon emission is the output and capital (K), labor (L), energy (E) (or electricity), and materials (M) are the inputs for the production process. The variables K, L, and M are essentially fixed on a daily or monthly basis, whereas E can be changed more frequently, such as daily or monthly, so that changes in carbon emissions depend on changes in E. If prices are assumed to depend on the average cost pricing, the prices of carbon emissions and energy may be approximated by an energy production model with a constant factor of proportionality, so that carbon emission prices are a function of energy prices. Using this novel modeling approach, this paper estimates the carbon emission prices for Japan using seasonally adjusted and unadjusted monthly data on the volumes of carbon emissions and energy, as well as energy prices, from December 2008 to April 2018. The econometric models show that, as sources of electricity, the logarithms of coal and oil, though not Liquefied Natural Gas (LNG,) are statistically significant in explaining the logarithm of carbon emissions, with oil being more significant than coal. The models generally displayed a high power in predicting the latent prices of carbon emissions. The usefulness of the empirical findings suggest that the methodology can also be applied for other countries where carbon emission prices are latent.

The Limit of Global Carbon Tax and its Climatic and Economic Effects (2019) 🗎🗎

Global carbon tax has been widely studied for a long time. However, its economic feasibility in specific countries and sectors has not been taken seriously. This study focuses on the limit of carbon tax in carbon reduction and its economic and climatic impacts. To accurately predict the economic impact of carbon tax for assessing its feasibility, a climatic-economic IAM named CIECIA is applied and improved by adding a carbon tax module. In this model, two levy types of carbon tax with an adjustable revenue distribution mode are designed. On the basis of this, the emission reduction limits of carbon tax and its economic and climatic effects are simulated. The results indicate that carbon tax reduces emissions in two ways: directly, by reducing the output of high-emission sectors, and indirectly, by promoting the adoption of low-carbon technologies. Global carbon tax can achieve the 2 degrees C climate mitigationtarget under a national independent mode, whereas under a global uniform mode, the limit of temperature control is around 2.46 degrees C. As the cost of carbon reduction, the economic loss is also significant, especially in developing countries. Investing R&D by using carbon tax revenue is an effective way to both reduce emissions further and ease economic loss. On the basis of this, we propose a Pareto improving scheme that both ensures the economic benefits of all participating countries and achieves climate mitigation targets.

Long-Term Distributional Impacts of European Cap-and-Trade Climate Policies: A CGE Multi-Regional Analysis (2019) 🗎🗎

Carbon pricing is a policy with the potential to reduce CO2 emissions in the household sector and support the European Union in achieving its environmental targets by 2050. However, the policy faces acceptance problems from the majority of the public. In the framework of the project Role of technologies in an energy efficient economy-model-based analysis of policy measures and transformation pathways to a sustainable energy system (REEEM), financed by the European Commission under the Horizon 2020 program, we investigate the effects of such a policy in order to understand its challenges and opportunities. To that end, we use a recursive-dynamic multi-regional Computable General Equilibrium model to represent carbon pricing as a cap-and-trade system and calculate its impacts on consumption of energy goods, incidence of carbon prices, and gross income growth for different income groups. We compare one reference scenario and four scenario variations with distinct CO2 reduction targets inside and outside of the EU. The results demonstrate that higher emission reductions, compared to the reference scenario, lead to slower Gross Domestic Product growth, but also produce a more equitable increase of gross income and can help reduce income inequalities. In this case, considering that the revenues of carbon pricing are paid back to the households, the gross income of the poorest quintile grows as much as, or even more in some cases, than the gross income of the richest quintile.

Green supply chain network design: A review focused on policy adoption and emission quantification (2019) 🗎🗎

We review the literature on green supply chain network design between 2010 and mid 2017, focusing primarily on models and methodologies that explicitly include carbon emissions and environmental policies. We find that supply chain network design has mostly incorporated four policies: carbon cap, carbon offset, cap-and-trade and carbon tax. All four policies succeed to achieve substantial emission reductions with a slight increase in total cost; mostly by configuring the supply chain to use lower-emitting resources. We investigate the prevalent sources of emissions within the supply chain. As expected, transportation contributes about one third, followed by power-intensive processes such as manufacturing, storage and warehousing. Other sources are raw material extraction and sourcing, facility construction and operation, and disposal. We observe that there is a lack of models that capture the complex nature of emissions. Nonlinear tax rates, multivariate emission functions and uncertainty are only considered in few papers. But most importantly, we find that the effect of emissions on demand is rarely accounted for.

Growth potential for CO2 emissions transfer by tariff reduction (2019) 🗎🗎

A reduction in tariff barriers facilitates the relocation of factories to countries with less stringent environmental regulations. There has been rapid growth in the transfer of emissions from developing to developed countries through international trade over the last 30 years. However, almost all countries still maintain their tariff barriers, and these tariffs limit the potential to increase carbon dioxide (CO2) emissions transfers. This paper aims to examine the impact of tariff reduction on the CO2 embodiment associatedwith the imports of the group of twenty (G20) countries. The econometric analysis uses disaggregated tariff data and CO2 embodied emissions data from1990 to 2013. Thefindings reveal that a 1% tariff cut by G20 countries for mining gas, manufacturedmachinery, metal, and other mining importswould result in 2779, 1747, 1453, and 1018 tons of CO2 emissions, respectively. Weshowthat a tariff cut would increase the embodied CO2 emissions significantly formost of the manufacturing and mining sectors. Here, we find there is a 3.5%-232.2% growth potential of CO2 emissions embodied in imports, depending on whether G20countries abolish tariff barriers. This scenario makes it difficult to achieve national emissions reduction targets and to implement national environmental policy.

Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms' competitiveness? Empirical findings from the literature (2019) 🗎🗎

Environmental policies may have important consequences for firms' competitiveness or profitability. For the European Union Emissions Trading System (EU ETS) the empirical literature documents that significant emissions reductions have resulted from it. Surprisingly, however, the literature shows that there have been hardly any concurrent negative effects on firms' competitiveness during the first two phases of the scheme (2005-2012). We show that the main explanations for the absence of negative impacts on competitiveness are a large over-allocation of emissions allowances leading to a price drop and the ability of firms to pass costs onto consumers in some sectors. Cost pass-through combined with free allocation, in turn, partly generated windfall profits. In addition, the relatively low importance of energy costs indicated by their average share in the budgets of most manufacturing industries may have limited the impact of the EU ETS. Finally, small but significant stimulating effects on innovation have been found so far. Several factors suggest that over-allocation is likely to remain substantial in the upcoming periods of the scheme. Therefore, we expect to see no negative competitiveness effects from the EU ETS in Phases III and IV (2013-2030).

The impact of demand uncertainties and China-US natural gas tariff on global gas trade (2019) 🗎🗎

The uncertainties in gas demand levels and geopolitical issues may lead to significant changes in global gas trade. This paper uses an agent-based model to simulate the alternative market futures under two demand trajectories: a baseline following current policy pledges until 2060 and another where demand shifts to a lower level in 2030. Endogenously generated capacity investments are driven by long-term bilateral contracts between importers and exporters, where investors are assumed to evaluate the potential risks of demand changes while making their decisions. The results suggest that, when the demand decreases in 2030, the Middle East takes the dominant position in Eastern Asia, whereas this role is occupied by North America in the current policy scenario. In addition, the impacts of a 25% tariff by China on U.S. natural gas are studied for both scenarios. The revenue of North American gas trade is only marginally affected by this tariff. Under the normal demand trajectory, the tariff influences the Chinese market more notably in the longer term when global supply is tightened by decommissioning. In the case of lower global gas demand, the market share of Russia in Western Europe could be threatened by increasing North American export there. (C) 2019 Elsevier Ltd. All rights reserved.

Impact of an emissions trading scheme on Australian households: A computable general equilibrium analysis (2019) 🗎🗎

Following the international commitment to tackle climate change issues, many countries have introduced climate change policies to reduce emission levels. Australia also expects to follow the international pathways to implement a climate change policy to curb its greenhouse gas emissions. In this context, the former Labor Government in Australia intended to switch its carbon tax policy to an emissions trading scheme (ETS) after 2 years of its initial operation to achieve an emission target of 5 per cent below the 2000 level by 2020. By employing a computable general equilibrium model and a social accounting matrix database, this article analyses the potential impacts of an ETS with various revenue recycling options on Australian households. Results show that an emission permit price of A$20 per tonne of CO2-e would help Australia to achieve the 2020 emission reduction target. This permit price is likely to have a small contraction in Australia's real GDP (i.e. about 0.3 per cent) and in real household consumption (i.e. about 0.19 per cent). The price of electricity is projected to increase by 13 per cent. The revenue recycling options seem to create an improvement in the macro-economy and there is a trade-off between economic efficiency and equity in the Australian economy with compensations. The personal income tax reduction policy results in an economic efficiency with a positive change in real aggregate household consumption whereas providing an equal lump-sum transfer brings benefits equally for all household groups. Increased government transfers based on recipients' current pension and allowance rates generate more welfare gains for middle-income household groups. (C) 2019 Elsevier Ltd. All rights reserved.

New method to assess the long-term role of wind energy generation in reduction of CO2 emissions - Case study of the European Union (2019) 🗎🗎

Most existing works using a displacement estimation method to estimate the CO2 emissions abated by wind energy are based on the current operating principles of the power system. They consider a fixed displacement emission factor since wind energy is assumed to replace high-carbon generation. This method may be unsuitable in the long run when the energy mix of most countries becomes more decarbonised. Consequently, wind energy would replace those technologies becoming increasingly predominant in the future, i.e. lower polluting fossil fuels such as natural gas and even other less competitive low-carbon technologies. In order to consider this effect, this paper proposes a new method that estimates a range of potential CO2 emissions abated by wind energy based on two dynamic displacement emission factors, which are periodically updated according to the evolution of the future energy mix. Such factors represent an upper and a lower limit of CO2 emissions avoided. The method is validated in the case study of the European Union over the period 2015-2050. The results show that the annual displacement emission factor by wind energy may vary from about 422 to 741 t CO2/GWh in 2015 to around 222-515 t CO2/GWh in 2050. The total CO2 abatement ranges from about 6600 to 13100 Mt CO2 in the period 2015-2050. (C) 2018 The Authors. Published by Elsevier Ltd.

Corrective regulations on renewable energy certificates trading: Pursuing an equity-efficiency trade-off (2019) 🗎🗎

As a common policy tool for reducing the cost of achieving the Renewable Portfolio Standard (RPS) targets, Renewable Energy Certificate (REC) trade can also exacerbate distributional inequity in provincial renewable electricity consumption. In this study, two types of corrective regulations-taxation and quotas on REC importing were proposed to pursue the equity-efficient trade-off. The energy, economic, and equity impacts of these corrective regulations were analyzed by applying a multi-region multi-market equilibrium model to China as a case study. The results verified that a free trade REC market can increase distributional inequity, while both import taxation and import quotas can reduce inequity. Compared to the electricity price premium for renewable energy and voluntary green certificate prices, the social cost of implementing these corrective regulations are within the public's willingness-to-pay. Moreover, the cost curve of increasing equity using the two corrective regulations on REC trade were obtained. Import taxation is found to be more cost-efficient, and therefore it should be the prior policy choice for China's central government comparing with import quotas in designing REC trade mechanisms. (C) 2019 Elsevier B.V. All rights reserved.

Impacts of the Quebec carbon emissions trading scheme on plant-level performance and employment (2019) 🗎🗎

In 2013, Quebec implemented a greenhouse gas (GHG) emissions trading system (QC ETS), despite opposition from industry, which feared loss of competitiveness and warned about job destruction. This article assesses the impact of that carbon regulation on industrial facilities in Quebec. Conditional difference-in-differences ordinary least squares regressions show that regulated plants reduced their GHG emissions by about 9.8%, employment by about 6.8% and carbon intensity by about 3.7% more compared to non-regulated plants in the rest of Canada during the period 2013-2015. This suggests that facilities adapted to the new program by improving their technology, but first and foremost by scaling down their activity, which raises questions about the ability of the QC ETS to induce enough environmental investment and innovation in industrial facilities. The results, in terms of employment effects, contrast with the findings of similar studies on the early stages of the European ETS and the British Columbia carbon tax scheme, and this information challenges the initial allocation scheme for permits, in particular, with a view to a green fiscal reform.

Does economic growth eat up environmental improvements? Electricity production and fossil fuel emission in OECD countries 1980-2014 (2019) 🗎🗎

We analyze to what extent electricity production by non-fossil fuel replaces fossil fueled electricity production in 27 OECD-countries 1980-2014. Depending on model specification, the long run replacement coefficient is in the range of minus 0.4-1.0, which is considerably larger than found in other studies. This means that an increase in non-fossil fuel based electricity production by 10 kWh/capita replaces fossil fuel based production in the range 4-10 kWh/capita. Over all the estimated replacement is not sufficient to prevent economic growth from increasing fossil based electricity production, thus eating up environmental improvements. However, we identify two important exceptions to this. First, countries with a 'low' level of fossil based production have an Environmental Kuznets Curve (EKC) relationship when we allow for separate effects of the economic downturn after the Great Recession 2008-2009. Second, results for the EU countries indicate that the EU Emission Trading System, and possibly EU country specific policy instruments, have influenced the mix of electricity production in the intended direction.

International market mechanisms under the Paris Agreement: A cooperation between Brazil and Europe (2019) 🗎🗎

Using the Economic Projection and Policy Analysis (EPPA6) model, this paper assesses Emissions Trading Scheme (ETS) cooperation between Brazil and Europe, using harmonised sectoral coverage (electricity generation and energy-intensive sectors). Land Use, Land-Use Change and Forestry (LULUCF) related emissions, which are significant in Brazil, are excluded from trading in the analysis, for two main reasons: (i) in an effort to closely align with existing provisions of the EUETS and (ii) to encourage other sectors of the economy to broaden their mitigation effort to comply with national climate targets. As a result, the relatively decarbonised electricity sector and the energy-intensive sectors in Brazil adopt ambitious targets under the proposal. The effects of the proposal are examined under three scenarios: a national ETS policy, a bilateral cooperation, and a global cooperation. Results show that a domestic ETS reduces emissions and promotes technological substitution towards alternative energy for both participants. Cooperation scenarios imply lower emission reductions in Brazil compared to a domestic ETS, where importing allowances from Europe is more cost-effective. For Europe, cooperating with Brazil has very limited impact on further mitigation. The global scenario sees both regions opt to acquire carbon permits from other regions where abatement costs are lower.

Analysis of CO2 transfer processes involved in global trade based on ecological network analysis (2019) 🗎🗎

A large share of total global CO2 emissions results from the production processes of internationally traded goods and services. Such emissions have been referred to as virtual or embodied CO2 flows. Hence, it is important to understand the directions, locations, and drivers of carbon flows resulting from global trade. To analyze these flows, hotspots, divisions of labor, and directions of flows in the global production and consumption web, we applied a multi-national framework based on a combination of multi-region input-output tables with ecological network analysis. We found that the CO2 flows between the 40 key countries within the network doubled between 1996 and 2011, and the trade-related emission hub shifted from Europe to Asia. We analyzed a large number of CO2 transfer paths and their changes over time. We found that the United States participated the most in big paths, including those that represent carbon flows between the United States and both developed and developing countries, whereas developing countries such as China and India participated more in the fastgrowing paths, and especially in paths between pairs of developing countries. In contrast, traditionally active countries, including Russia and Germany, grew at a slower rate, resulting in a progressively smaller share in the global system. Taking these large and important CO2 transfers into consideration, we proposed adjustments to the national mitigation targets set by the Paris Agreement.

Greening the South Africa's Economy Could Benefit the Food Sector: Evidence from a Carbon Tax Policy Assessment (2019) 🗎🗎

South Africa has a competitive and viable food production sector which enables the country to be a consistent net exporter of agricultural products. Lately, the business and labour organisations have raised concerns that the government's intention to implement the carbon tax policy will affect the food supply, subsequently exacerbating the unemployment and food insecurity in the country. Carbon tax is one of the policy tools to be implemented in order to reduce the growing greenhouse gas emissions thus helping the government meets its Paris Agreement commitments. South Africa's National Treasury released a second draft of the carbon tax bill in 2017, which takes into account the concerns raised by different organisations. In this paper, we evaluate the potential impact of the carbon tax policy on agriculture, food and other sectors using a dynamic computable general equilibrium model. The results show that the carbon tax is an effective policy tool to mitigate emissions, as they decline by 33% relative to the baseline by 2035. This also leads to a welfare loss of R98.326 billion as the country transforms into a green economy. The carbon-intensive sectors like transport, steel and coal-generated electricity experiences significant output decline. However, the agriculture and food sectors show improvements in terms of jobs and production when the carbon tax is implemented. The positive effects on these two sectors are greatly reduced if tax exemptions provided to the agricultural sector are removed and the tax revenue is not recycled in the form of production subsidy to industries.

Environmental Stress Testing for China's Overseas Coal Power Investment Project (2019) 🗎🗎

The advance of the Chinese "Belt and Road" initiative encourages increased overseas investment in coal power projects. However, it also brings about external environmental risks. In this paper, we use the approach of environmental stress testing to examine China's overseas coal power investment projects by focusing on two countries: Indonesia and Vietnam. We first identify five key testing factors (i.e., coal price, utilization hours, exchange rate, carbon tax, and environmental protection requirements) by examining the market regulation and the environmental risks of coal power projects along the "Belt and Road" countries. Then, we observed changes in the enterprise value and internal rate of return (IRR) by setting different scenarios in which the values of the five stress factors varied. The results show that (1) the economics of coal-fired projects in Indonesia is most sensitive to exchange rate, while the economics of coal projects in Vietnam is most sensitive to coal price; (2) the pressure of nationally determined contributions (NDC) goals on environmental protection will push the "Belt and Road" countries to implement more stringent environmental regulation, which will reinforce environmental stress on overseas coal power investment. These results have important policy implications for the enterprise, industry, and Chinese government.

Taxing air pollutants and carbon individually or jointly: results from a CGE model enriched by an emission abatement sector (2019) 🗎🗎

We analyse the separate and collective impacts of emissions taxation to understand the internalisation effects of externalities. The analysis is carried out using a static computable general equilibrium model, with unemployment, bottom-up abatement technologies represented by a step function, and detailed emission coefficients. Environmental and health external costs are quantified using the ExternE's Impact Pathway Approach. Emissions, as a result of environmental taxation, fall through reduced output, production factor substitution, and increased end of pipe abatement activity. The analysis shows that a full internalisation of environmental externalities can result in modest overall economic and environmental welfare gains. There are, however, differences in terms of employment and output, depending on what combination of taxes are applied, which sectors are covered, and how fiscal revenues are redistributed. Air quality benefits range from euro35-75 per ton of CO2 abated. Total environmental benefits always exceed GDP loss and the associated welfare loss.

Energy subsidy reform for growth and equity in Egypt: The approach matters (2019) 🗎🗎

Phasing out energy subsidies is high on the agenda of policymakers in several Middle Eastern and North African countries. The impact of such reform can vary widely depending on the country and policy. This paper contributes to the existing literature by examining the phasing out of energy subsidies in Egypt under alternative economic scenarios. In particular, we consider Egypt's short- and long-term economic adjustment under different assumptions on labor market flexibility, spending options of subsidy savings, and alternative social protection measures. Results from economy-wide model simulations suggest that energy subsidy cuts may hamper economic growth in the short term, but depending on the policy measure, will improve growth perspectives and household welfare in the longer term. Yet, findings also point to likely adverse impacts of the reform on household consumption in the short and longer run. To counteract such negative impacts, targeted social protection measures should be continued and scaled up in parallel with the phasing out of energy subsidies.

Fine particulate matter damages and value added in the US economy (2019) 🗎🗎

Emissions of most pollutants that result in fine particulate matter (PM2.5) formation have been decreasing in the United States. However, this trend has not been uniform across all sectors or regions of the economy. We use integrated assessment models (IAMs) to compute marginal damages for PM2.5-related emissions for each county in the contiguous United States and match location-specific emissions with these marginal damages to compute economy-wide gross external damage (GED) due to premature mortality. We note 4 key findings: First, economy-wide, GED has decreased by more than 20% from 2008 to 2014. Second, while much of the air pollution policies have focused to date on the electricity sector, damages from farms are now larger than those from utilities. Indeed, farms have become the largest contributor to air pollution damages from PM2.5-related emissions. Third, 4 sectors, comprising less than 20% of the national gross domestic product (GDP), are responsible for similar to 75% of GED attributable to economic activities. Fourth, uncertainty in GED estimates tends to be high for sectors with predominantly ground-level emissions because these emissions are usually estimated and not measured. These findings suggest that policymakers should target further emissions reductions from such sectors, particularly in transportation and agriculture.

Trade in Environmental Goods and Air Pollution: A Mediation Analysis to Estimate Total, Direct and Indirect Effects (2019) 🗎🗎

Based on panel data covering 114 countries between 1996 and 2011, this study investigates the impact on pollution of trade in environmental goods (EGs). We check the validity of the implicit consequences assumed by the win-win scenario in the current trade-climate negotiations, arguing that market dynamics should guarantee that EGs' liberalization is 'automatically' in the interest of all countries, regardless their market and institutional capacities. We show that trade in EGs alone fail to address environmental problems effectively. In particular, although we found efficiency gains from trade in EGs (in terms of CO2 and SO2 emissions per 1 US$ of GDP), and more recurrently for net exporters than for net importers, our results often failed to highlight environmental effectiveness (in terms of total CO2 and SO2 emissions). A general conclusion that emerges from our empirical results is that trade [in EGs] cannot effectively replace non-market-based solutions, when it comes to non-trade objectives. However, it seems to complement them efficiently. Our multiple-equation GMM estimations reveal specific direct, indirect and total effects on pollution depending on the countries' net trade status, leading to several policy recommendations for an increased environmental effectiveness of trade in EGs.

Fossil fuel carbon taxation policy effect on thai household expenditure using input-output price structural path model (2019) 🗎🗎

Taxation levying promotes and enhances the management of greenhouse gas emissions; however, its effect on product price increases for households requires clarification. The impact of a fossil fuel taxation policy on Thai household expenditure was investigated. Carbon taxation rate was based on abatement cost. An input-output price model was applied to establish economical price structures and price changes as a carbon result of implementing a carbon taxation policy. A national consumer expenditure survey and price changes were used to evaluate the carbon tax burden distribution on each households, which have different expenditure. By using marginal abatement cost curve, reduction target is 175 MtCO(2)e by 2030. Results indicated that achieving the reduction target by that time is possible, although welfare losses in households were inevitable. Price increases resulting from implementing carbon taxation in each product sector ranged from 0.8 to 19.6%. Commodity price changes were largest for high carbon-intensive sectors including Public utilities (19.6%), Nonmetallic products (15.7%), and Transport & Communication (8.5%). Welfare losses per household from taxation were around 3-4% for each group, resulting from both price changes and expenditure patterns. Highest tax burden fell on the economically inactive group that spent a larger share of their income on basic survival essentials which were heavily impacted by increased prices. (c) 2019 American Institute of Chemical Engineers Environ Prog, 38:e13146, 2019

Identifying the environmental footprint by source of supply chains for effective policy making: the case of Spanish households consumption (2019) 🗎🗎

Household consumption has been identified to have an essential role in influencing ultimately the environmental pressures generated by human activities. This study assesses the indirect environmental footprint of the Spanish households applying a combination of consumer expenditure surveys with environmentally extended multi-regional input-output analysis. A total of fourteen environmental impact categories are studied from 2006 to 2015. All the impact categories present a similar trend, particularly affected by the economic crisis. The impacts decreased from 2008 to 2013 and finally slightly started rising again from 2014 to 2015. Results show that the dominant categories influencing the indirect environmental footprint in 2015 are (1) food and beverages, (2) housing, and (3) furnishings. From the intensity perspective, housing, transport, and food and beverages appear to be the most intensive consumption clusters in the Spanish household indirect environmental footprint. In relation to the indirect water impacts embodied in the Spanish households' imports, the largest amount is from European countries and the highest virtual water (59%) corresponds to food and agriculture, in particular from wheat, fruit, vegetables, and dairy products. The findings obtained in relation to the sources generating indirect impacts from household consumption could aid the implementation of future mitigation policies.

Calculation of tourist sector electricity consumption and its cost in subsidised insular electrical systems: The case of the Canary Islands, Spain (2019) 🗎🗎

The Canary Islands is a European archipelago whose principal economic activity is international tourism. Due to its geographic isolation, it does not have any connection with continental electricity grids. The Spanish state subsidises the extra cost of electrical energy generation in isolated systems. The purpose of this study is to quantify the proportion of the electricity bill that corresponds to tourist activity that is being subsidised. With this aim, three complementary methodologies have been developed. These tools could also be used in similar environments. The results reveal an average tourist sector consumption in the study years (2014-2017) between 12.8% and 16.5% of the total amount of electricity generated in the archipelago, with a monetary value of Spanish state subsidy estimated in (sic)143.5 M in the year 2014. Additionally, a calculation was made of the values of CO2 emissions due to tourist electricity consumption for the years of the study period, with an estimated peak of 1.1 MtCO(2) in 2017. From the point of view of energy policy, these results could be used to justify the adoption of various types of compensatory measures, including ecotaxes to be paid by the tourist visitor.

Sources of emission reductions: Market and policy-stringency effects (2019) 🗎🗎

International trade and economic development affect air emissions. Previous studies have decomposed their effects into scale, composition, and technique effects. While the scale and composition effects occur through market responses, the technique effect is a policy-stringency influence through the mix of environmental policies. This study analyzes whether the market or policy-stringency effects are more prominent. Previous studies have been unable to adequately separate the market and policy-stringency effects. To independently measure the technique effect, we use two indicators of policy stringency, i.e. shadow prices of energy and industrial energy prices. These policy stringency measures are treated as endogenous. The effects on six types of air emissions are estimated utilizing a sector-specific, international panel dataset that includes newly industrialized and former transition economies. The empirical results show that the major source of emissions reductions is the policy stringency effect through carbon-related policies. Pollution offshoring to countries with weaker carbon-related regulation has a minor role in the reduction of air emissions. (C) 2018 Elsevier B.V. All rights reserved.

China's emissions trading system and an ETS-carbon tax hybrid (2019) 🗎🗎

China is introducing a national carbon emission trading system (ETS), with details yet to be finalized. The ETS is expected to cover only the major emitters but it is often argued that a more comprehensive system will achieve the emission goals at lower cost. We first examine an ETS that covers both electricity and cement sectors and consider an ambitious cap starting in 2017 that will meet the official objective to reduce the carbon-GDP intensity by 60-65% by 2030 compared to 2005 levels. The two ETS-covered industries are compensated with an output based subsidy to represent the intention to give free permits to the covered enterprises. We then consider a hybrid system where the non-ETS sectors pay a carbon tax and share in the CO2 reduction burden. Our simulations indicate that hybrid systems will achieve the same CO2 goals with lower permit prices and GDP losses. We also show how auctioning of the permits improves the efficiency of the ETS and the hybrid systems. Finally, we find that these CO2 control policies are progressive in that higher income households bear a bigger burden. (C) 2019 Elsevier B.V. All rights reserved.

Patterns and drivers of household carbon footprint of the herdsmen in the typical steppe region of inner Mongolia, China: A case study in Xilinhot City (2019) 🗎🗎

Understanding the household carbon footprint (HCF) and its relevant drivers is the foundation for reducing greenhouse gas (GHG) emissions to mitigate global warming. Many HCF studies have been conducted in urban or rural areas, while little is known about pastoral areas. We surveyed 404 herdsmen households in the typical steppe region of Inner Mongolia to evaluate their direct and indirect HCF following the life cycle assessment (LCA) approach, and analyzed the driving factors by structural equation modeling (SEM). We found that (1) the average HCF of herdsmen in the region was 6.56 t CO2, and the proportion of the indirect HCF was slightly higher (52.23%) than that of the direct HCF (47.77%); (2) the HCF was influenced, in order of importance, by the economic level, demographic characteristics, and geographical position of the household. The economic level directly influenced the HCF, while the demographic characteristics and geographic positions indirectly affected the HCF by affecting the economic level; (3) the HCF exhibited a significant positive correlation with annual household income. Changes in the energy and dietary structure, and the development of public infrastructure are recommended to reduce the HCF. (C) 2019 Elsevier Ltd. All rights reserved.

Emissions, energy and economic impacts of linking China's national ETS with the EU ETS (2019) 🗎🗎

With the increasing popularity of emission trading system (ETS) worldwide and the necessity of international cooperation on climate change, the interest of linking various ETSs is growing. This paper adopts a multi regional, general equilibrium model to simulate linkages between China's national ETS and the EU ETS and analyze the emissions, energy and economic impacts of such linkages. In order to study the role of linking in further increasing mitigation ambitions of China and the EU, and compare unlimited linkage with limited linkage, the paper further develops scenarios in which both China and the EU set higher ambition cap for their ETSs and unlimited or limited linkage is established between the two ETSs. The results indicate that unlimited linking can effectively promote the emission reduction ambitions of both China and the EU without inducing additional welfare losses to them. When both China and the EU set more intensified targets for ETS sectors and undertake additional 169 million tons carbon reductions, unlimited linking can make China's welfare remain basically unchanged and the EU's welfare increase by 0.29%, compared to implementing ETS independently under original reduction targets. However, unlimited linking has adverse effects on the competitiveness of China's energy intensive sectors and the development of EU's renewable energy. Compared to unlimited linking, limited linking effectively reduces these adverse effects. The paper concludes that China's national ETS and the EU ETS can establish a linkage to further increase their ambitions, while at the same time use import quotas to limit the permits that can be traded to reduce the negative impacts of linking on the two systems.

Demand and supply-side carbon linkages of Turkish economy using hypothetical extraction method (2019) 🗎🗎

Inter-industrial carbon linkage analysis tells us about the transfer of CO2 amongst sectors of a nation. Hypothetical extraction model which removes a target sector and compares the difference between actual and theoretical economies is a popular model for linkage analysis. Regardless of mounting evidence favoring simultaneous application of both Ghosh supply and Leontief demand for forward and backward linkages. Related studies have mostly calculated both upstream and downstream carbon linkages using only demand-driven Leontief inverse model. This research estimates inter-sectoral carbon linkages of Turkey from both demand and supply. Electricity, gas, and water had the highest total demand and supply carbon linkage. Extraction of backward and forward linkages of mixed services have the highest demand pull and supply push impact on rest of the blocks. It also had the highest amount of net pulled and pushed emissions. Production block had the highest intra-sectoral purchase emissions while electricity, gas, and water had the highest internal sales emissions. Wind and Solar PV are the cleanest energy sources for Electricity, gas, and water supply. A carbon demand and supply based policy diversifies emission responsibility and encourages mitigation of a block's entire upstream, downstream and intra-sectoral carbon chain. (C) 2019 Elsevier Ltd. All rights reserved.

Cap-and-trade and emissions clustering: A spatial-temporal analysis of the European Union Emissions Trading Scheme (2019) 🗎🗎

One of the most popular policy mechanisms for greenhouse gas emissions regulation is cap-and-trade which is a market-based approach that has come to dominate partially because of its flexibility. With flexibility, however, comes the potential for the clustering of greenhouse gas emissions. To understand whether emissions trading leads to localized clustering of emissions changes, we perform a systematic, spatio-economic assessment of the European Union Emissions Trading Scheme (EU ETS). We analyze the spatial pattern of emissions changes from individual plants across the EU as well as how the pattern changes during the first two phases of the ETS implementation. Our findings indicate that there was clustering of emissions changes at the EU and country level which peaked at the start of the second phase but declined as the EU ETS matured. We also found that iron and steel, coke ovens, and refining have greater clustering and volatility compared to other industries. Based on the air quality implications of these clustered emissions, certain countries and industry types might need additional attention during the ETS design or redesign process. This study makes a novel contribution by systematically evaluating the spatio-temporal and equity implications of emissions distribution in cap-and-trade systems.

Does renewable energy substitute LNG international trade in the energy transition? (2020) 🗎🗎

Renewable energy is a vital tool for the energy transition and sustainable development goals. The global economy, however, remains heavily reliant on fossil fuels despite efforts to reduce global greenhouse gas emissions. Demand for natural gas is rising as a bridge for moving towards a low-carbon economy, but whether natural gas and renewable energy represent substitutes in the global energy mix remains underexplored. We tackle this concern by examining the impact of renewable policies on international trade in liquified natural gas (LNG) among 1359 trading partners during the period 1988-2017. We measure renewable energy policies based on the ratio of renewable energy to total energy usage in importing trading partners, which also corresponds to a proxy for energy transition policies. The analysis is conducted using a global panel dataset in a trade gravity framework by applying various econometric methods and model specifications to measure LNG trade as a dependent variable. The results show that the energy transition, measured by the share of renewable energy, has a negative impact on LNG trade. This suggests that investing in cleaner energy technologies can reduce LNG trade globally, as a channel towards reducing natural gas demand. The results are consistent with the narrative where natural gas and renewable energy represent partial substitutes at the global level. However, subgroup analysis suggests that less developed economies and the shale revolution period seem to impede progress towards the energy transition. (C) 2020 Elsevier B.V. All rights reserved.

Does emission trading lead to carbon leakage in China? Direction and channel identifications (2020) 🗎🗎

Unilateral emission trading may lead to carbon leakage. The leakage direction and channel are critical to multilateral emission mitigation. Despite the increasing number of investigations into the carbon leakage induced by emission trading, there is a lack of empirical research on the specific leakage channels related to the emission trading market. This paper develops a difference-in-difference-in-differences model to identify carbon leakage directions in emission trading pilots in China. The issue of whether market participation and industrial transfer are the specific leakage channels related to emission trading is also examined. Emission trading pilots lead to reverse carbon leakage, which moves from the non-pilot region to the pilot region. Market participation and industrial transfer are confirmed to be the specific leakage channels in emission trading. Of the two channels, market participation is the one that determines the reverse direction.

Impact of Subsidy and Taxation Related to Biofuels Policies on the Economy of Thailand: A Dynamic CGE Modelling Approach (2020) 🗎🗎

Thailand is the leader in biofuel, biodiesel and bioethanol production in South East Asia, using cassava, sugar cane and palm oil as feedstock. This study used econometric estimation to feed into a recursive dynamic computable general equilibrium model to analyze the impacts of biofuel policies on the economy of Thailand. We carried out several simulations on two set of issues (a) policy of increasing excise tax that consists of 12 scenarios such as increasing excise tax on oil products at a higher rate than biofuel products. The excise tax varies from 10 to 40% and (b) policy of increasing subsidy on biofuel consisting of four scenarios by subsidizing at 10-40% rate. The simulations indicate that increasing excise tax on oil products and biofuel products would increase Thailand's gross domestic product, social welfare and total energy consumption. For subsidy on biofuel, increasing subsidy would not lead to significant increase in GDP, social welfare and energy factors. These results imply that government should carefully decide on a balance of excise tax and subsidy, but ensure that price of biofuel products cheaper than other oil products to attractive the biofuel consumption.

A bridge too far? The role of natural gas electricity generation in US climate policy (2020) 🗎🗎

Natural gas has been promoted as a "bridge" fuel toward a low-carbon future by offering near-term emissions reductions at lower cost. Existing literature is inconclusive on the short-term emissions benefits of more abundant natural gas. The long-lived nature of natural gas infrastructure also threatens to lock in emissions levels well above longer-term targets. If natural gas can offer short-to-medium term benefits, how much of a bridge should we build? Using ARTIMAS, a foresighted computable general equilibrium model of the US economy, we interact scenarios developed by the EMF-34 study group related to abundant natural gas, low-cost renewables, and a carbon tax to examine the role of natural gas in a carbon-constrained future. We find that abundant natural gas alone does not have a significant impact on CO2 emissions. We also find that, under a higher carbon tax, natural gas investment of approximately $10 billion per year declines to zero at a tax of about $40/ton and existing natural gas assets face significant risk of impairment. Last, the presence of abundant natural gas lowers the marginal welfare cost of abating small amounts of CO2 but is likely to raise the cost of abatement levels consistent with common climate objectives. The integrated welfare costs of climate policy depend on how much abatement we must undertake.

Appraising food waste generation and forecasting food waste to energy potentials of hospitals in Turkey: A global to local analysis (2020) 🗎🗎

Energy consumption and food waste generation from hospitals are overlooked sustainability problems. In this study, semi-empirical models based on per bed and per unit area data, and scenarios based on low, average and high food waste generation were constructed. Annual energy consumption, food waste generation and associated energy contents of food wastes produced from Turkish hospitals were estimated using these semi-empirical models and scenarios. It was found that Turkish hospitals could have consumed nearly 8600 GWh of energy in 2018. This is equal to 3.3% of Turkey's annual electricity consumption in the same year. It was calculated that nearly 49,0 0 0 tonnes of food waste could have been generated from Turkish hospitals in 2018. This amount of food waste has an energy content worth nearly 1.00% the probable energy consumption of Turkish hospitals in the same year. (c) 2020 Institution of Chemical Engineers. Published by Elsevier B.V. All rights reserved.

Economic and environmental co-benefit of natural gas supply chain considering the risk attitude of designers (2020) 🗎🗎

Nature gas plays a fundamental role in promoting cleaner production worldwide. Given this, evaluation of the natural gas supply chain from the perspective of both economic and environmental-friendly should be considered simultaneously while proposing a comprehensive estimation model remain a challenge in the performance improving study. What's more, the inherent uncertainty and strong variation associated with natural gas demand attach difficulty in precise analysis and make an impact on the stable gas supply. This paper proposes an integrated mathematical model to estimate the economic and environmental (2-E) performance, where multiple natural gas products and transportation modes are considered in economic section, and the major carbon emission from upstream production to downstream users are given in the environmental part. An index is formulated to indicate the supply risk caused by the uncertain gas demand. Considering the risk attitude of supply chain designers may have a significant impact on the final 2-E performance, three scenarios namely Risk Neutral Scenario, Risk Aversion Scenario, and Risk-taking Scenario are applied to quantify the impact. The case study result demonstrates that 1) In comparison to the neutral scenario model which is commonly used in the literature, the annual economic profits and total carbon dioxide emission in this paper have a 6.78 million CNY and 2.06 kiloton variation, respectively. 2) The pipeline layout and location of functional stations are coincident within three scenarios, while the detailed transportation scheme in the operation period changed a lot. 3) The reliability varies from 99.88% to 89.37% within three scenarios, and the supply chain designers can make a tradeoff between the 2-E performance and supply risk according to the proposed relationship between theme. (c) 2020 Elsevier Ltd. All rights reserved.

Phase out tariffs, phase in trade? (2020) 🗎🗎

An important stylized fact in the empirical Free Trade Agreement (FTA) literature is that member trade flows gradually increase over time following an FTA. Baier and Bergstrand (2007) suggest two explanations: tariff phase-out and delayed pass-through of tariffs into import prices. We examine these hypotheses using 1989-2016 U.S. import growth and product-level data on the tariff phase-out negotiated under NAFTA and the earlier Canada-U.S. FTA. We do not find evidence supporting either hypothesis. While products receiving tariff cuts do show delayed import growth relative to products with unchanged tariffs, the delay in import growth does not correspond to delays in the timing of tariff cuts. We also show that tariff cuts are fully and immediately passed through to U.S. importers as there are virtually no changes in the prices received by exporters either in the short run or the long run. Rather, we find evidence for an important role played by NAFTA tariff cuts reducing the impact of frictions that, in turn, allow for a spatial expansion of imports across the U.S. (c) 2020 Elsevier B.V. All rights reserved.

Natural gas infrastructure development in North America under integrated markets (2020) 🗎🗎

The exploitation of low-cost shale gas in the Marcellus Formation, the deregulation initiatives in the U.S. and Mexico, and the emergence of natural gas as a bridging fuel to a low-carbon economy has fueled the growth of North American natural gas production, which is projected to keep growing in the mid-term to support the increasing LNG exports. Greater introduction of renewables and deeper electrification suppress both supply and demand for natural gas in the long-term. The long lead times of pipeline operation and field exploitation render the timing of natural gas abatement critical to natural gas infrastructure stakeholders. Full integration of the U.S., Canadian, and Mexican natural gas markets implies that the abatement trajectories of the three countries are tightly linked. This paper studies the development of the integrated North American natural gas markets and infrastructure under different assumptions on resource availability, technological progress, and global crude oil prices. We quantify the impact of each scenario by using the North American Natural Gas Model. Our analysis shows that cross-border U.S.-Mexico trade is more resilient under all three shocks compared to U.S.-Canada trade. Increasing Mexican production could drive the growth of the domestic Mexican market instead of reducing U.S.-Mexico trade.

The Impact of Retailers' Low-Carbon Investment on the Supply Chain under Carbon Tax and Carbon Trading Policies (2020) 🗎🗎

In the current low-carbon economy, the government has adopted carbon taxes and carbon trading policies to control the carbon emissions of manufacturers. As consumers become increasingly aware of low-carbon, some retailers have also started investing in low-carbon to shape their public image and increase their competitiveness to attract more customers. In this paper, the Stackelberg game method is utilized to solve the model, and the graphs are used to analyze the benefits of retailers' low-carbon investment on the supply chain through numerical analysis. It is found that when the emission reduction cost coefficient of manufacturers is relatively low, manufacturers are willing to reduce carbon emissions. At this time, increasing carbon tax and the carbon emission permits price can effectively promote the emission reduction behavior of manufacturers, because it increases demand for products and the profit of manufacturers and retailers. However, when the emission reduction cost coefficient of the manufacturers is quite high, increasing carbon tax and carbon emission permits price cannot effectively promote the emission reduction behavior, because this situation of the emission reduction reduces the profit of manufacturers. The main contribution of this paper discovers that the green cost coefficient of retailers' low-carbon investment will adjust the impact of the carbon tax and the carbon trading price on the profits of retailers and manufacturers which proves that retailers' low-carbon investment is beneficial to the supply chain. When the emission reduction cost coefficient is high and the green cost coefficient is low, increasing the carbon tax or carbon emission permits price can increase the profit of manufacturers and retailers. Finally, we design a supply chain coordination of comprehensive sharing contact for retailers and manufacturers. The result shows that this contract has economic and environmental benefits, and that it is beneficial for the environment and economy of sustainable development.

Low-carbon transition in a coal-producing country: A labour market perspective (2020) 🗎🗎

The decarbonisation of energy in a coal-producing country involves phasing out the coal sector and reducing employment in coal mining. Our case study of Poland reveals that in the past, half of the workers that left the mining sector failed to move to other sectors and left the labour market. This could be explained by the lower education levels of miners and lower wages in other sectors relative to mining. We use a mathematical model to demonstrate that if ex-miners fail to move to green or neutral sectors, decarbonisation involves a net loss of the labour force, regardless of the number of jobs created in the green sector. The loss of labour constitutes a macroeconomic cost that must be added to changes in energy system costs. The size of the cost does not depend on whether reduction of emissions is achieved by the substitution of coal with renewable energy sources or by an increase in energy efficiency. The size of the cost is largest when the reduction of emissions is achieved by replacing coal with imported gas. Finally, we demonstrate how costs related to the imperfect transition of labour could be taken into account in numerical general equilibrium models.

Are all jobs created equal? Regional employment impacts of a US carbon tax (2020) 🗎🗎

While the environmental benefits of carbon taxes are well documented, their employment impacts are not. We simulate an escalating $25/tCO(2) tax on the U.S. electricity system and estimate the resulting employment effects using a computable general equilibrium model. Meta-modeling of the results reveals how carbon taxes influence costs, prices, fuel shares and jobs. Overall, we estimate that the carbon tax would increase U.S. employment - e.g., by 511,000 jobs in 2030. Regional heterogeneities are explained, in part, by the path dependency of electricity portfolios and by regional resource variations. The carbon tax would motivate significant CO2 emission reductions, as well as utility bill increases that could on average be offset by carbon tax dividends. The possibility of inter-regional wealth transfers is highlighted, underscoring the importance of revenue recycling and other policy features that promote inclusive benefits.

Climate change and green transitions in an agent-based integrated assessment model (2020) 🗎🗎

In this paper we employ an agent-based integrated assessment model to study the likelihood of transition to green, sustainable growth in presence of climate damages. The model comprises heterogeneous fossil-fuel and renewable plants, capital- and consumption-good firms and a climate box linking greenhouse gasses emission to temperature dynamics and microeconomic climate shocks affecting labour productivity and energy demand of firms. Simulation results show that the economy possesses two statistical equilibria: a carbon-intensive lock-in and a sustainable growth path characterized by better macroeconomic performances. Once climate damages are accounted for, the likelihood of a green transition depends on the damage function employed. While energy efficiency shocks (which raise the demand of energy) exert little effects on the macroeconomic performance compared to labour productivity impacts, they disproportionally harm the chances of an energy transition by exacerbating path-dependence in the process of technical change in favour of fossil-fuel technologies. Finally, we run a series of policy experiments on carbon (fossil fuel) taxes and green subsidies. We find that the effectiveness of such market-based instruments is limited, though it also depends upon the different channels climate change affects the economy through. Complementary policies might be required to avoid carbon-intensive lock-ins.

The economic and environmental impacts of UK offshore wind development: The importance of local content (2020) 🗎🗎

We explore, through simulation of a purpose-built Input-Output model of the UK, the economic and emissions impacts of the likely future development of the UK's offshore wind sector, with a particular emphasis on the importance of local content. We explore six scenarios, including two illustrative simulations of the potential impact of Brexit on local content. We find that future offshore wind development does indeed generate a policy "double dividend" in the form of simultaneous and substantial reductions in cumulative emissions, which in each case exceed a year of the UK's total emissions, and improvements in economic activity (of nearly 30 pound billion cumulative increase in value-added when the 60% target for local content is achieved). It is also the case that, as anticipated, the scale of the economic stimulus arising from offshore wind development is directly and strongly related to the extent of local content. Future work could extend the modelling to relax the supply side assumptions of input-output modelling, disaggregate the analysis by regions and households to allow assessment of the impacts on the distribution of both economic activity across regions and income among household quintiles. (C) 2020 Elsevier Ltd. All rights reserved.

Recycling carbon tax for inclusive green growth: A CGE analysis of India (2020) 🗎🗎

In this decade, India has been pursuing a low carbon inclusive growth strategy. However, carbon tax, the most direct price instrument to reduce carbon emissions, has not found favour with policymakers because of its supposed detrimental effects on economic growth and income distribution. In the Indian context, the literature indicates that though carbon tax is extremely effective in abating carbon emissions, it simultaneously leads to reductions in GDP. There is, thus, an undesirable trade-off between economic growth and climate change mitigation. However, in trying to overcome this trade-off through a double-dividend from carbon tax, these studies have not really explored all possible options. Whether the carbon tax will yield a double-dividend or not, will depend upon how the carbon tax revenue is recycled. The present paper fills this gap in the literature on recycling carbon tax for inclusive green growth by exploring the consequences of using carbon tax revenue for investment to build capacity in all sectors or exclusively in the clean energy sectors and to execute transfers to households to improve the distribution of income. This analysis has been done with a recursively dynamic India-specific CGE model having a disaggregated energy sectors and an endogenous income distribution module.

A macroeconomic evaluation of a carbon tax in overseas territories: A CGE model for Reunion Island (2020) 🗎🗎

Reunion Island, similar to most insular regions, is ruled by a carbon-based economy that is heavily dependent on fossil fuels. In recent years, the energy transition towards a low-carbon economy has become the watchword of this French overseas region, with the objective of a 100% renewable energy mix by 2030. Reducing fossil fuel use while maintaining economic growth is an important issue for all countries but is even more important for island territories with structural and geographical handicaps. Energy transition and drastic greenhouse gas emission reductions represent costs and opportunities that need to be quantified. This research paper assesses the environmental and macroeconomic effects of the carbon price policy introduced in France to meet the target of the Paris Agreement. The acceptability of the tax significantly depends on the possibility of recycling tax revenues. Different schemes for recycling tax revenues are considered in simulations. The methodology used is a computable general equilibrium (CGE) model for Reunion Island (GetRun-NRJ) that takes into account all island specificities. The results show that the carbon tax enables substitutions between fossil and renewable energy production and reduces CO2 emissions. However, the tax has negative effects on the aggregate economy. The implemented tax revenue recycling compensation mechanisms mitigate the negative impacts, but the results differ significantly, as the recycling schemes do not support the same economic actors.

CLIMATE CLUBS WITH TAX REVENUE RECYCLING, TARIFFS, AND TRANSFERS (2020) 🗎🗎

The E3ME-FTT model is applied to assess the impacts of alternative climate club structures. We consider two kinds of climate club memberships: the World Climate Club (WCC), where every country in the world joins the club, and the Core Climate Club (CCC), with seven likely club members: EU+5, Japan, South Korea, Canada, Brazil, Mexico, and Australia. First, we find that both the WCC and domestic revenue-neutral recycling matter a lot. The global CO2 emissions in 2050 could be reduced by 50% from BAU under the WCC. With domestic revenue-neutral recycling, there will be large positive impacts on GDP under both the WCC and the CCC. Secondly, the negative effects of trade sanctions on cumulative global GDP and global CO2 emissions make it unwelcome to be used as part of the club design. Lastly, the introduction of international transfers will result in a win-win solution that will not only increase the cumulative global GDP and reduce global CO2 emissions but also enhance the equality among club members and induce more likely participation in the climate club.

Comparing Applied General Equilibrium and Econometric Estimates of the Effect of an Environmental Policy Shock (2020) 🗎🗎

We compare the employment effect of the British Columbia carbon tax using two empirical methods: a reduced-form econometric model and counterfactual simulations conducted using an applied general equilibrium (CGE) model. The comparison allows us to test the theory-driven predictions of the CGE model. It also allows us to test the identification strategy of our econometric model. Ex post, we find statistically and economically significant effects on sectoral employment levels from the carbon tax-with employment falling in the most carbon-intensive sectors and rising in the least carbon intensive. The CGE model predicts employment responses of very similar sign and magnitude to our econometric estimates. We find no evidence to suggest that our econometric estimates are likely to be undermined by general equilibrium effects in this policy setting. Finally, we explore the use of the econometric estimates to deepen the empirical content of the CGE model.

Optimal Decisions for Two Risk-Averse Competitive Manufacturers under the Cap-and-Trade Policy and Uncertain Demand (2020) 🗎🗎

With the increasingly serious problem of environmental pollution, reducing carbon emissions has become an urgent task for all countries. The cap-and-trade (C&T) policy has gained international recognition and has been adopted by several countries. In this paper, considering the uncertainty of market demand, we discuss the carbon emission reduction and price policies of two risk-averse competitive manufacturers under the C&T policy. The two manufacturers have two competitive behaviors: simultaneous decision making and sequential decision making. Two models were constructed for these behaviors. The optimal decisions, carbon emission reduction rate, and price were obtained from these two models. Furthermore, in this paper the effects of some key parameters on the optimal decision are discussed, and some managerial insights are obtained. The results show that the lower the manufacturers' risk aversion level is, the higher their carbon emission reduction rate and utilities. As the carbon quota increases, the manufacturers' optimal carbon reduction rate and utilities increase. Considering consumers' environmental awareness, it is more beneficial for the government to reduce the carbon quota and motivate manufacturers' internal enthusiasm for emission reduction. The government can, through macro control of the market, make carbon trading prices increase appropriately and encourage manufacturers to reduce carbon emissions.

Bio-ethylene from sugarcane as a competitiveness strategy for the Brazilian chemical industry (2020) 🗎🗎

The urgency with which the world economy needs to be decarbonized could lead to the emergence of regions with the capacity to produce renewable feedstock such as biomass. The competitiveness of these regions could result from their ability to produce high value-added chemicals at the lowest cost. The biomass embodied in a chemical product could reduce carbon emissions, leading to net CO2 removal. The aim of this study was to test the hypothesis that bio-ethylene could make the Brazilian chemical industry more competitive. This would be achieved by applying the revenues from carbon credits associated with using ethanol and sugarcane bagasse as feedstocks for bio-ethylene production. Three production routes were compared according to their estimated cost of production in Brazil under a simplified life-cycle analysis: sugar-cane-derived ethanol to ethylene (with and without CO2 capture and storage - BECCS); bio-methanol to olefin; and conventional steam cracking of naphtha. When associated with the production of long-lasting materials, the ethanol-to-ethylene with BECCS route achieved the lower CO2 break-even price (US$75/t CO2), followed by ethanol to ethylene without BECCS (US$82/t CO2) and bio-methanol to ethylene (US$106/t CO2). Our findings highlight the advantage for the Brazilian chemical industry of implementing a national or, even better, a global carbon-pricing instrument. (c) 2019 Society of Chemical Industry and John Wiley & Sons, Ltd

Pricing behavior of monopoly market with the implementation of green technology decision under emission reduction subsidy policy (2020) 🗎🗎

Carbon emissions are one of the major constraints considered under a Cap-and-Trade (C-and-T) system, regarding the implementation of green technologies in the operations of emissions-generating companies. Green technology implementation, based on optimal pricing decisions, has become an inevitability due to rising carbon emissions. We studied the profit-maximizing behavior of a firm considering whether to implement of green technology due to subsidies offered on emission-reduction rates. In order to achieve the desired results, we used a simulation-based model and developed a conceptual model for the verification of functions. When the product price was high, the firm achieved a high profit, which was the main focus of the firm. The firm thus had sufficient resources to implement green technology. However, when the product price was low, the firm could achieve its goal of profit maximization, but did so without implementing green technology. To solve this problem, we studied government involvement in the market to incentivize emissions reduction and to benefit the firm. We decided to model emissions-reduction policy to encourage the implementation of green technology and support firm profits. We found that subsidies enabled a firm to maximize its profits while ensuring green technology implementation, while the firm would not have adopted green technology without subsidies or mandates. This study should help decision makers understand pricing strategies in the maximization of the profit. Additionally, this study helps demonstrate that the government plays an important role in monopolized markets by reducing negative externalities. (C) 2019 Elsevier B.V. All rights reserved.

Environmental and economic impacts of trade barriers: The example of China-US trade friction (2020) 🗎🗎

The new age of trade wars could simultaneously affect the worldwide distribution pattern of the economy and environmental emissions. However, previous studies have focused on economic impacts, and on trade liberalization, while little is known about the equilibrium effects of trade barriers on the environment. Using a global computable general equilibrium model and taking the recent anti-trade policies of the Trump administration as an example, this study investigates the possible socio-economic and environmental effects of trade friction. Specifically, this study explores how the implemented six rounds of China-US trade friction and its different long-term development trends affect regional economic output, GHG and air pollutant emissions. Results show that trade barriers harm both countries' economies and such losses have a certain permanence, while non-participants can benefit indirectly. Trade friction decreases participants' GHG emissions, modifies global GHG emission distribution patterns, and leads to improved air quality in most countries. If governments continue to impose tariffs, global GHG emissions could counterfactually decrease by up to 5%. However, the change in trade patterns is not conducive to clean energy development in the less-developed regions, including the Middle East, Africa, and Latin America, and emission reductions from trade friction are insufficient to avoid catastrophic climate change. (C) 2019 Elsevier B.V. All rights reserved.

Does improved environmental quality prevent a growing economy? (2020) 🗎🗎

A major concern for sustainable development is how countries can lower pollution while avoiding adverse output and energy shocks. Since economic activities change with time, we develop a dynamic applied equilibrium model to study the dynamics of CO2 emissions and evaluate how the pursuit of environmental policy objectives can influence output and productivity in a surrogate country in transition. Under an optimal environmental policy which ensures mitigation between 38 and 50%, we show that productivity, projected towards the year 2075, increases slightly from between 3.8 and 6.2% to between 5.7 and 7.6%, respectively. The required carbon tax begins from $ 5.29/ton in 2020 and grows on average by 3.5% reaching up to $ 35.83 per ton carbon towards the year 2075. Even though these tax rates ensure huge benefits for mitigation, they represent marginal productivity growth and substantial output and consumption costs. In other words, improved environmental quality presents opportunities for multifactor productivity (MFP) but this productivity improvement is too marginal to offset the compliance costs of the carbon tax, thereby, causing output to decline. Hence, to ensure maximum economic dividend from carbon pricing especially in transitional economies, measures are required to improve the innovation benefits of carbon taxes towards levels that offset the compliance costs of environmental regulations. Otherwise, caution should be taken by developing countries in their environmental policy designs especially when boosting consumption and economic growth is a major priority. (C) 2019 Elsevier Ltd. All rights reserved.

THE IMPACTS OF THE EU ETS ON NORWEGIAN PLANTS' ENVIRONMENTAL AND ECONOMIC PERFORMANCE (2020) 🗎🗎

This paper examines the impacts of the EU Emissions Trading System (ETS) on the environmental and economic performance of Norwegian plants. The ETS is regarded as the cornerstone climate policy in the EU and Norway, but there has been considerable debate regarding its effects due to low quota prices and substantial allocation of free allowances. The rich data allow us to investigate potential effects of the ETS on several important aspects of plant behavior. The results indicate a weak tendency of emissions reductions among Norwegian plants in the second phase of the ETS, but not in the other phases. We find no significant effects on emissions intensity in any of the phases, but positive effects on value added and productivity in the second phase. These positive effects may be due to the large amounts of free allowances, and that plants may have passed on additional marginal costs to consumers.

The response of CO2 emissions to the business cycle: New evidence for the US (2020) 🗎🗎

This paper investigates the response of CO2 emissions to the business cycle for the U.S. on a monthly basis between 1973 and 2015. Using a rolling-regression approach, we find that the emissions elasticity with respect to GDP is not constant over time, irrespective which filtering method, such as the Hodrick-Prescott, the Baxter-King, the Christiano-Fitzgerald or the Butterworth filter has been employed. In order to check whether or not emissions react differently during normal and recession times, next, we employ a Markov-switching approach. We find, first, that emissions are significantly more elastic during recessions than in normal times. Second, depending on the filtering method, we also obtain parameter estimates of the emissions elasticity above one in recession times and below one in normal times. The results are also robust against including monetary policy also in times of the zero lower bound. Thus, environmental policy instruments not turning out to be sub-optimal should account for this asymmetric response of emissions due to changes in GDP. (C) 2019 Elsevier B.V. All rights reserved.

Do sustainable energy policies matter for reducing air pollution? (2020) 🗎🗎

Yes, they matter. To reply to this question, we assess the impact of energy efficiency and renewable energy policies on six different air pollutants: carbon dioxide (CO2), methane (CHO, nitrous oxides (N2O), nonmethane volatile organic compounds (NMVOCs), nitrogen oxides (NOx) and sulfur dioxide (SO2) in Italian provinces in the decade 2005-2015. The empirical analysis is performed in a panel data context by means of propensity score matching with multiple treatments, since our framework is characterized by the presence of two treatments, corresponding to the two different energy policies analyzed, i.e. energy efficiency policy and renewable policy. These two policies can be applied by each province as mutually exclusive strategies or as joint strategies. Our results show that renewable policies are the most effective in terms of climate goals especially when implemented on a local scale, while energy efficiency policies alone are ineffective. Moreover, the success of these policies depends on the type of pollutant to be reduced. Finally, we note that the effect of energy policies was reinforced by the counter-cyclical fiscal policies implemented to counter the Global Financial Crisis in 2008.

The impacts of the trade liberalization of environmental goods on power system and CO2 emissions (2020) 🗎🗎

The trade liberalization of Environmental Goods (EG), through as Environmental Goods Agreement (EGA), is crucial in low carbon electricity technology diffusion. However, there is a big gap of the EG definition lists and the integrated effectiveness analysis of EGA. This paper analyses the effects of the trade liberalization of EG based on macroeconomic and electricity sector models and attempts to find a more efficient EG trade policy by comparing different EG lists, considering end-use control and combining the EG policy with a carbon tax. The results show that the trade liberalization of EG does not necessarily benefit the environment without other policies, as the effects of the multiple end-uses of EG on conventional energy might result in environmental damage. We find that merging an EGA into a global carbon tax system would enhance the effects of carbon tax on CO2 reduction by 33%, and simultaneously lower the GDP loss due to the carbon tax by 75%. The economic benefits from the EGA could offset the costs of other environmental policies. Thus, end-use control and other environmental policies should be considered at both the global and regional levels in the setting of international trade agreements that target EG.

The environmental and economic impact of the emissions trading scheme (ETS) in Vietnam (2020) 🗎🗎

This study aims to fill a gap in the literature by examining the impacts of an emissions trading scheme (ETS) in Vietnam, as the policy has been discussed for a decade in the country but the likely impacts on the economy and different sectors are still unidentified. The simulations are carried out in a global energy computable general equilibrium (CGE) model, an extension of the GTAP-E model, which treats Vietnam as a country region. Results show that restricting the number of industrial sectors in the emissions trading market substantially affects the country's economy with a decline in real GDP by 4.57%. However, the country experiences much smaller adverse impacts (e.g., real GDP declines by 1.78%) when all industries participate in the emissions trading market. In either case of the ETS design, the coal mining, manufacturing, transportation, and electricity sectors are highly adversely affected; however, the crude oil and natural gas extraction sectors would experience expansion in their production levels due to substitutions for coal. In general, under the policy the emission levels from burning fossil fuels decline at significant rates, particularly from the electricity generation sector.

Development of the electricity-environmental policy CGE model (GTAP-E-PowerS): A case of the carbon tax in South Africa (2020) 🗎🗎

A new carbon price mechanism with full emission coverage is developed within the framework of a global computable general equilibrium model (GTAP-E-PowerS) to enhance the capacity and accuracy for climate change and energy policy assessment. The model developed is then used to examine the potential impacts of the carbon tax in South Africa. Results show that incorporation of non-CO2 emissions in the model significantly alters the results of which the economy of South Africa experiences higher costs compared to the case that only has CO2 emissions. When more sectors are included in the policy it also puts higher costs on the economy, as higher levels of emissions are subject to the carbon tax. Results also show that South Africa only experiences small tradeoffs from introducing the carbon tax in all scenarios. That is, with a tax rate of $9.15, the country is able to reduce its emission levels by 12.25%-15.6% at the costs of real GDP reduction by 1.17%-1.59%. Fossil-based industrial sectors are particularly worst off, while clean and renewable energy sectors strongly expand their production. The results indicate that South Africa is likely to move to a low carbon and sustainable economy with such a policy.

Exploring Tradeoffs in Merged Pipeline Infrastructure for Carbon Dioxide Integration Networks (2020) 🗎🗎

Carbon integration aims to identify appropriate CO2 capture, allocation, and utilization options, given a number of emission sources and sinks. Numerous CO2-using processes capture and convert emitted CO2 streams into more useful forms. The transportation of captured CO2, which poses a major design challenge, especially across short distances. This paper investigates new CO2 transportation design aspects by introducing pipeline merging techniques into carbon integration network design. For this, several tradeoffs, mainly between compression and pipeline costs, for merged pipeline infrastructure scenarios have been studied. A modified model is introduced and applied in this work. It is found that savings on pipeline costs are greatly affected by compression/pumping levels. A case study using two different pipe merging techniques was applied and tested. Backward branching was reported to yield more cost savings in the resulting carbon network infrastructure. Moreover, both the source and sink pressures were found to greatly impact the overall cost of the carbon integration network attained via merged infrastructure. It was found that compression costs consistently decreased with increasing source pressure, unlike the pumping and pipeline costs.

Evaluating the efficiency of carbon emissions policies in a large emitting developing country (2020) 🗎🗎

Using the energy-environmental version of the Global Trade Analysis Project, this study compares the effects of three carbon emissions mitigation strategies a carbon tax, a fuel tax and an emissions trading scheme (ETS) to combat the intended emissions target for Indonesia, a large emitting developing country. Although the fuel tax was found to raise economic growth by 0.29% in 2030, the carbon tax and ETS which reduce economic growth by about 0.11% have less adverse effects on inflation, welfare loss, wage decline, and employment loss. Unlike the fuel tax, the carbon tax and ETS are also likely to promote substitution towards renewable energy given the massive increase in the price of coal of over 100% due to the carbon tax and ETS. To meet Indonesia's emissions target, a carbon tax of US$36/ton of CO2 is needed. The carbon tax which is simpler and more swiftly implementable is the more practical choice compared to the ETS in the short to medium term for developing countries with political economy constraints in their energy and transportation sectors.

Carbon policies, fossil fuel price, and the impact on employment (2020) 🗎🗎

Carbon policies can be expected to increase the price of fossil fuel, either directly through a cap-and-trade system or carbon tax, or indirectly by regulations that place an implicit tax on fossil fuel. We construct a theoretical model to decompose the effect on employment in a specific industry caused by an increase in the price of fossil fuel. We find that the total effect is determined by the market's responsiveness to the changes of the prices of fossil fuel and final product. We verify the theoretical model by an empirical analysis of China's thermal power industry. Because China is the largest carbon emitter in the world and thermal power industry is the biggest carbon emitter industry in China, the empirical model has strong reference value for other countries and industries. Policy makers should be prepared to mitigate any adverse effects on employment that a carbon policy might cause. [GRAPHICS] .

Quantifying the Economic Cost of Reducing GHG Emissions through Changes in Household Demand: A Linear Multi-Sectoral Approach for European Countries (2020) 🗎🗎

The mitigation of Greenhouse Gas Emissions can be approached in various ways: from the supply side, by using improvements in technologies and input uses; and from the changes in the demand for products, by influencing consumer behavior to achieve a more sustainable consumption pattern. Either way it can be approached using multi-sectoral data based on an input-output or on a Social Accounting Matrix (SAM) framework, although a suitable database and the proposal of appropriate indicators are needed. A suitable database is developed through the estimation of new SAMs for the latest possible period, that of year 2015. This paper focuses on the demand approach: that of changes in the demand for products. It analyzes the different impacts among activities and commodities of a change in domestic household consumption patterns, compares the potential reductions in Greenhouse Gas (GHG) emissions obtained through the reduction of specific demands, and considers the consequent reduction in output and employment. For this purpose, a linear multi-sectoral analysis is employed that focuses on the main EU member states. Despite major differences between countries, the results show that a decrease in emissions through demand-reduction policies exerts greater negative effects on those less polluting sectors with a higher intensity in the labor force, and offers a more suitable option for those highly polluting sectors with a lower concentration of the work factor. Richer countries that are based on service sectors therefore suffer a sharper drop in employment using this kind of policy.

A simulation study of China's imposing carbon tax against American carbon tariffs (2020) 🗎🗎

This study proposes two types of simulation scenarios aimed at carbon emission reduction which China can adopt in response to carbon tariff threats from the US. These are to take the same carbon tax policy as the United States (that is $40 per ton of carbon tariffs) and differentiated tax policy (that is, the "common but differentiated responsibilities" and product competitiveness point of view, US imposes a $40 per ton carbon tax on domestic products, while China imposes a $9 per ton tax on domestic products). Setting four specific policy scenarios (the United States takes a carbon tax collection only on products that are produced from their own country; the United States imposes a carbon tax both on domestic products and on products exported from China; China and the United States adopt the same carbon tax policy for their own domestic products; and China and the United States adopt differentiated carbon tax policies for their own domestic products), this study uses an Energy-Environmental Version of the Global Trade Analysis Project model (GTAP-E) to explore whether China's active emission reduction can be an effective choice to deal with the US carbon tariff threat. The results of the research showed a 1.4% fall in China's GDP resulting from a $40 per ton of carbon tariff on Chinese products although such move by China is to avoid carbon tariffs on China's exports to the United States. This adverse economic effects thus makes this method an ineffective way of dealing with the threats. When China imposes a carbon tax of $9 per ton on domestic products, China's real GDP and residents' welfare decline but are effectively controlled, and the world's total carbon dioxide emissions also reduce considerably. Therefore, in this way, China can effectively deal with the threat of US carbon tariffs. This paper applies the GTAP-E model to refine the research different from existing research on model building. It analyzes the change of China's economy, carbon dioxide, and industry output and import under the different situations. This will help take reasonable measures in our country when dealing with the carbon tariffs. (C) 2019 Elsevier Ltd. All rights reserved.

IMPACTS OF MECHANISMS TO PROMOTE PARTICIPATION IN CLIMATE MITIGATION: BORDER CARBON ADJUSTMENTS VERSUS UNIFORM TARIFF MEASURES (2020) 🗎🗎

Because free-riding behavior is an inherent characteristic of climate change, how to protect the economic benefits of the emission reduction regions and prompt the noncooperative region to join the emission reduction coalition is particularly important. In this study, we use a global multi-region multi-sector CGE model to compare the impacts of border carbon adjustment (BCA) and two unified tariff mechanisms based on different implementation principles on USA. The results show that the BCA is more effective in reducing carbon leakage in USA than the uniform tariff mechanism s. However, for GDP and welfare losses, the scenario Tariff-carbon-reduction results in greater GDP and welfare losses in USA, which is more conducive to prompting USA to implement carbon reduction policies than the BCA measures. Finally, the sensitivity analysis of carbon price levels and key substitution elasticity further confirmed the results.

To Whom Should We Grant a Power Plant? Economic Effects of Investment in Nuclear Energy in Poland (2020) 🗎🗎

Poland is the most coal-dependent economy and one of the biggest polluters in the EU. In order to alleviate this problem, meet CO2 emission requirements set by EU, and improve the country's energy security, Poland decided to introduce nuclear power to its energy mix. So far, several potential locations for nuclear power plants have been officially proposed, mainly based on technical parameters, but no comparisons of the economic impact of such locations have been considered. Consequently, the main goal of this paper is to compare the national and regional economic effects of investments in nuclear power plants-for both the construction and exploitation phases-in the four most probable locations, which are similarly beneficial from a technical point of view. In order to simulate these effects, the spatial recursive dynamic Computable General Equilibrium model was calibrated until 2050 including agglomeration effects and featuring the regional economies of all Polish regions. The results show that although the construction phase is beneficial for economic development in all four regions, the exploitation phase is good for only one. The economies of the other regions suffer, to a greater or lesser extent, from the Dutch disease. The paper argues that the regional economic effects of such an investment differ significantly, due to differences in the regions' economic structures; hence, they should always be taken into account in the final decisions on the power plants' locations.

Carbon endowment and trade-embodied carbon emissions in global value chains: Evidence from China (2020) 🗎🗎

Recent literature highlights global value chains and the trade-embodied carbon emissions; however, it fails to explain how changes in positions within global value chains affect the emissions embodied in a certain economy's trade. Carbon emissions are the by-product of production activities that use fossil-fuel-based energy; these emissions can be treated as an ideal measure of the carbon endowment of a certain economy, and they are directly related to environmental regulations. This study constructs an extended environmental Heckscher-Ohlin-Vanek model by treating carbon emissions as a measure of carbon endowments to explain the flow patterns of the trade-embodied emissions under a global-value-chain framework. This study also investigates the impact of a certain economy's emissions embodied in trade due to a change in position within a global value chain. The results show that a Heckscher-Ohlin-Vanek model can be used to explain the carbon-flow patterns of China and its trading partners. Economies gathered at the two ends of these global value chains are found to have lower or even negative net carbon outflows, while economies that are trapped at the middle-to-high levels of their global value chains, especially those with relatively abundant carbon endowments, tend to have higher net carbon outflows. To reduce their net emissions embodied in trade, these economies should institute stricter environmental regulations, optimize their energy structures and improve their energy efficiencies. Another effective way to eliminate the carbon-lock-in effect would be move up or down along global value chains to stay close to either end of the production chain.

Initial incidence of carbon taxes and environmental liability. A vehicle ownership approach (2020) 🗎🗎

A German panel data of vehicle and owner characteristics is used to analyse the incidence of additional carbon taxes. It is shown that an additional carbon tax on fuel used for private transportation is regressive when there is no allocation of tax revenue. When smoothing consumption across time in the face of additional carbon taxes, low income households can reduce the tax burden. When the cost of air pollution is included in the metric for the tax incidence, the tax burden decreases considerably. It is also found that in order to charge drivers for the attributed emissions, carbon taxes need to be set at least at (sic)30 per tonne of CO2 emissions. Moreover, the estimated own price elasticities suggest that an additional carbon tax may fail to induce owners of vehicles with an intense usage to reduce energy consumption. Consequently, carbon taxes need to be designed jointly with other taxes to target heavy polluters.

The future GHG emissions of tourism by Brazilians (2020) 🗎🗎

The rapid development of tourism in emerging countries is a major contributor to the sector's growing greenhouse gas (GHG) emissions. An assessment of emissions produced by Brazilian tourists confirms this trend, and reveals the importance of each country's unique economic, social and environmental factors, which make it difficult to treat emerging countries as a homogenous group. This paper explores the possible futures of Brazilian tourism emissions by using various scenarios, starting with the reconstruction of submarkets based on transport modes and distances travelled, using national sources for the year 2010. A reference scenario shows that GHG emissions are likely to be multiplied by four by 2030 and by eight by 2050. Finally, alternative hypotheses on the driving forces behind Brazilians' domestic and international tourism are combined and used as building blocks to develop alternative scenarios. The outcome of reasonable mitigation options would maintain tourism's contribution to national greenhouse gas emissions in 2030 at a level comparable to those currently observed in highly developed countries. However, between 2030 and 2050, tourism emissions would continue to grow, whereas national emissions would diminish. Tourism could therefore become a major burden in national mitigation policies.

HOW CARBON MARKET COOPERATION CHANGES THE ENERGY SYSTEMS IN NORTHEAST ASIA (2020) 🗎🗎

This paper explores the impact of international emissions trading (IET) among Korea, China, and Japan, three countries that would form the largest potential carbon market in the world. The Nationally Determined Contribution for each country forms the basis of scenario analyses using GCAM (Global Change Assessment Model). As expected, China emerges as the sole net seller of emissions permits while Korea and Japan are the net purchasers of emission permits produced by China. All participants enjoy gains from emissions trading. The implementation of IET changes the power systems of Korea and Japan by favoring increased conventional fossil fuel usage over renewable power technologies or attached carbon capture and storage (CCS) technologies, while China's power system moves in the opposite direction, by boosting the deployment of renewables and CCS-attached technologies. Considering the counterproductive incentives for Korea and Japan to consume more carbon-intensive energy sources, each country should consider such issues carefully before officially adopting IET as the pillar of climate policy.

DESIGNING A GLOBALLY ACCEPTABLE CARBON TAX SCHEME TO ADDRESS COMPETITIVENESS AND LEAKAGE CONCERNS (2020) 🗎🗎

To address competitiveness and leakage concerns in international climate policy, this paper proposes a differentiated carbon tax scheme (DCT), which largely preserves the relative competitive positions of developed and developing countries. The paper first presents a theoretical model from which to derive the DCT. Then, employing a global trade analysis model, competitiveness and leakage effects under a DCT are simulated and contrasted to those of a unilateral carbon tax, a carbon tariff, and a uniform carbon tax. The results of our analysis suggest that: (1) under the proposed DCT, emission reductions in developed and developing countries are higher and leakage is lower than under a carbon tariff; (2) the DCT has weaker competitiveness effects than a carbon tariff; and (3) the DCT is more favorable to developing countries' output and welfare than a carbon tariff or a uniform global carbon tax. Developing countries may therefore embrace a DCT as an intermediate step towards the implementation of a global carbon tax.

The impact of regulatory and financial discrimination on China's low-carbon development: Considering firm heterogeneity (2020) 🗎🗎

Firms in China within the same industry but with different ownership and size have different production functions and face different emission regulations and financial conditions, thus can give very different responses to environmental policies. This fact has been largely ignored in most of the low-carbon development related literature. Using an augmented Chinese input-output table in which information about firm size (large-and small and medium-sized firms) and ownership (state-, foreign-, and private-owned firms) are explicitly reported, a dynamic computable general equilibrium model is developed in this study to analyze the impact of alternative low-carbon policy designs with different regulatory coverage and financial equalization on heterogeneous firms. Our simulation results show that, with the fully balanced regulation coverage and equalized financial system for heterogeneous firms, the total green investment accounts for 4% of GDP in 2030 for fulfilling China's commitment to reduce carbon emissions, which is the lowest among the various scenarios; about one-third of this investment is made by small and private firms; at the same time, green investment efficiency will be the highest, about 84% higher than that of the business-as-usual level. Therefore, a market-oriented and new technology-driven arrangement and mechanism for sharing emission reduction burden and allocating green investment across heterogeneous firms, especially to small and medium-sized firms, is crucial for China to achieve a more ambitious emission target in the long run.

Well-to-tank carbon emissions from crude oil maritime transportation (2020) 🗎🗎

International seaborne transport of crude oil takes place mainly on tankers, with annual seaborne crude flows totaling an estimated 12 billion barrels. To take into account the carbon footprint on crude oil from its international distribution segment, we utilize a micro-level dataset of more than 28,000 individual shipment samples to estimate each journey's carbon emissions. The unique detailed dataset enables us to aggregate carbon emissions at the country level for importers and exporters, by trade lane, and by vessel size categories. Our methodology provides a framework for crude oil consumers to dynamically account for the carbon footprint of the commodity which is transported via different trade routes and by different vessels (size and age). So far, this dynamic emissions accounting has been largely neglected by oil consumers who typically apply one single emission factor regardless its supply chain. Our results highlight the importance for importers to consider the origin and point-of-use of crude oil in order to have a comprehensive view of its carbon footprint. The quantitative analysis in this study can feed into well-to-tank fuel emissions factors for oil and oil products in order to adopt dynamic emissions factors in companies' carbon accounting. Finally, our research is important for the design of new environmental policies for the corporate Environmental Social Governance (ESG) reporting to include downstream logistics in the overall emission accounting of oil companies.

The market-linkage of the volatility spillover between traditional energy price and carbon price on the realization of carbon value of emission reduction behavior (2020) 🗎🗎

Establishing a carbon market is widely regarded as an effective means of controlling global carbon emission. Purchasing carbon emission right will increase the cost of enterprises, especially for high-energy consumption industry. The volatility of carbon market will undoubtedly affect the behavior of these enterprises. It has been well recognized that there is significant interaction between the carbon market and the fossil energy (crude oil, natural gas and coal) market. This paper employs recurrence plot (RP) method and recurrence quantification analysis (RQA) method to investigate the volatility spillover between the three different energy futures markets and carbon emission market. The result shows that the volatility spillover between the coal market and carbon emission market is strongest. Based on this, in order to avoid the risk from the carbon emission market, industries should switch from coal to natural gas or oil, and this behavior will lead to the reduction of carbon emission. Industries will change their energy consumption structure to a much cleaner one which will reduce air pollutant and the emission of carbon dioxide on the realization of carbon value. (C) 2019 Elsevier Ltd. All rights reserved.

Spatial variation in household consumption-based carbon emission inventories for 1200 Japanese cities (2020) 🗎🗎

Given that national pledges are likely insufficient to meet Paris greenhouse gas (GHG) reduction targets (Fawcett et al 2015 Science 350), increasingly actors at the city and state level are looking for options on how local government can contribute to reducing GHG emissions. For a typical city only one third to half of their carbon footprint (CF) is emitted within the jurisdiction, while the majority is embodied in goods and services flowing into the city. To support well-informed mitigation efforts, administrators need robust inventories of both direct emissions as well as the supply chain emissions. Here we construct household CF inventories for 1172 Japanese cities using detailed consumer expenditure data and a Japanese domestic multi-regional input-output (MRIO) model. We identify the consumption activities which city policymakers can target to reduce CF. We observe a strong concentration of household CF in a few cities in Japan: 40% of the total Japanese CF is driven by 143 cities. Understanding a city's consumption-based CF of households in addition to its direct emissions exposes additional policy options for each citizen to contribute to achieving national goals.

Balancing climate and development goals (2020) 🗎🗎

Decarbonizing the energy system is a major challenge facing the richest countries, whereas provision of energy services is a major challenge facing the poorest countries. What would be the climate consequences if only richer countries focus on decarbonization, and only poorer countries focus on provision of energy services? To address this question, we create future scenarios in which carbon dioxide (CO2) emissions increase according to a historical trend and then start to decline only when countries reach specified income levels. In our central case, we assume that when countries start to decarbonize, they reduce emissions at 2% yr(-1). With this assumption and if all countries begin to decarbonize in 2020, the world would be expected to warm by 2.0 degrees C relative to pre-industrial times. If countries begin to decarbonize only when their per capita gross domestic product (GDP) exceeds $10 000, there would be less than 0.3 degrees C of additional warming. Yet over half the world's population currently lives in countries below such an income threshold, and continued direct CO2 emissions by people who live in these countries, while they remain underdeveloped, would increase global average temperature rise by 14% relative to the case, in which all people begin to decarbonize in 2020. The primary concern of developments driven by fossil fuels in lower income countries might relate to issues such as the technological lock-in to high-emission technologies.

How does carbon tax affect social welfare and emission reduction in Finland? (2020) 🗎🗎

Environmental concerns related to fossil fuels utilization has developed different energy/environmental policy tools that Carbon tax is one of the important ones. There are huge debates among different political parties related to the positive and negative effects of the carbon tax on the energy and environmental policies of the countries. However, carbon tax not only can have effects on the utilization and consumption of energy sources portfolios, but it may also have negative or positive effects on the economy, industry, and social welfare of the countries that should be identified and analyzed, in particular for countries with high energy-intensive industries such as Finland. The purpose of this research is to answer the question: "How does Carbon Tax affect social welfare and emission reduction in Finland?'' We use the computable general equilibrium model to analyze the impact of the carbon tax on social welfare and the rate of emission reduction. Considering the fact that Finland has several years of carbon tax policy application background, evaluation of the impact of this policy on Finland's social-environmental structure is very valuable for other countries, especially newcomers. Our results show that despite carbon tax policy in Finland has been successful in the reduction of carbon dioxide emissions, however, it has negative effects on the social welfare of Finns. Therefore, an optimum level of the carbon price is recommended for future policy revision (C) 2020 The Authors. Published by Elsevier Ltd.

Can embedded knowledge in pollution prevention techniques reduce greenhouse gas emissions? A case of the power generating industry in the United States (2020) 🗎🗎

Following the well-known public information disclosure program, the Toxics Release Inventory (TRI), the United States established the Greenhouse Gas Reporting Program (GHGRP), which documents annual direct GHG emissions from major point-source polluters from 2010 onwards. While recorded GHG emissions in the GHGRP have declined over time, few studies have shed light on the mechanism through which such reduction is achieved. This paper empirically examines whether experience in managing toxic pollutants subject to the TRI pre-GHGRP contributed to the decrease in GHG emissions post-GHGRP. We use data from electrical power plants to construct various measures for the magnitude and diversity of knowledge in pollution prevention (P2) pre-GHGRP. Using a difference-in-differences framework with first-differenced panel data, we find that electrical power plants with abundant experience in P2 achieved a greater reduction in GHG emissions by 2.3%-4.8% compared to less-experienced plants post-GHGRP. This suggests that policymakers can leverage a plant's prior knowledge and experience with P2 techniques to develop targeted strategies to facilitate the transfer of embedded knowledge to other firms and pollutants.

Are the European manufacturing and energy sectors on track for achieving net-zero emissions in 2050? An empirical analysis (2021) 🗎🗎

The European Green Deal has established a 2050 net-zero emissions target to tackle climate change. The manufacturing and energy sectors account for at least 40% of European emissions and are central in the transition to a low-carbon economy. Thus, devising suitable strategies for reaching net-zero emissions requires a comprehensive analysis of emissions reductions achieved by the two sectors. This paper has a two-fold aim: firstly, to empirically analyse European energy and manufacturing facilities' abatement results; secondly, to expose whether the two sectors are on track to achieve net-zero emissions by 2050. We used European Union Emissions Trading System data from 2005 to 2017 from France, Germany, Italy, Spain, and the United Kingdom to analyse the homogeneity of mitigation performances and the distribution of emissions among installations. The results indicate that a large share of installations have not decreased emissions yet, although there is substantial variety in units' contribution to total carbon releases. A smaller bundle of units (from 13 to 23%) containing super-polluters is responsible for up to 95% of emissions. The findings highlight that achieving netzero emissions by 2050 will require additional policies that are tailored to super-polluters and also support installations that have not started their decarbonisation pathway.

Two-Stage Robust Optimization Model for Fresh Cold Chain considering Carbon Emissions and Uncertainty (2021) 🗎🗎

Sustainable development is an everlasting theme and lasting strategy in today's era. Low-carbon economy is an inevitable approach to the implementation of sustainable development. Cold chain logistics has become one of the main sources of carbon emissions. However, in the research on location planning of cold chain logistics, the costs of carbon emissions have not been taken into consideration in previous studies. The two-stage stochastic optimization (TSSO) model was established based on the comprehensive consideration of transportation costs, time penalty costs, and carbon emission costs. In this case, it is extremely difficult to deal with uncertainty in TSSO model. Therefore, this paper constructs a two-stage robust optimization (TSRO) model using data-driven method and robust optimization theory and verifies the validity of this model through an actual case. The application of this method to a cold chain logistics enterprise showed that the service level of logistics cannot be guaranteed by stochastic optimization model. In the TSRO model, the costs increase by 2.18% at the price of robustness, whereas logistics service level shows an upward trend (from 85.83% to 92.75%). In the TSRO model, enterprises are forced to choose a better distribution path when carbon tax increases, which not only helps enterprises save costs but also achieves low-carbon environmental benefits.

The role of national carbon pricing in phasing out China's coal power (2021) 🗎🗎

As the country with the world's largest coal power capacity, China is launching a national carbon market. How the carbon pricing may contribute to phasing out China's coal power is a great concern. We collect full-sample data set of China's 4540 operating coal plant units and develop a stochastic Monte-Carlo financial model to assess the financial sustainability of the plant operation. Although China's coal plants have long residual technical lifetime, their operations are close to the break-even state. Even with low carbon price of 50 CNY/tCO(2) growing at 4%/y and the permits being fully auctioned, the average residual lifetime of all the plants will be reduced by 5.43 years, and the cumulative CO2 emission from 2020 to 2050 will be reduced by 22.73 billion ton. The spatial disparity in the carbon pricing effect is significant, and the western regions are more vulnerable to the carbon pricing risk than the eastern regions.

Short- and long-run dynamics of energy demand (2021) 🗎🗎

The timing of the response of CO2 emissions to a carbon tax depends crucially on the timing of the response of energy demand to changes in energy prices. In this paper we investigate the path of changing energy demand from the moment of a change in price until it reaches its new steady state. First, by applying the LeChatelier principle, we show that the response of energy demand in the short run must be smaller than in the long run if firms are only able to adjust their choices of technology in the long run. Secondly, using a putty-clay model with induced technological change, we show that the elasticity of demand approaches its long-run level exponentially at the rate that is determined by the capital depreciation rate and the growth rate of the economy. Thus, according to the model, it takes more than 8 years from the introduction of the carbon tax until half of the long-run effect of induced technological change on energy demand is realised in developed countries. We also illustrate the macroeconomic consequences of the long-run adjustment of energy demand by incorporating the theoretical model into a multi-sector DSGE model of the Polish economy. We find that the adjustment of energy demand reduces the negative impact of CO2 tax on GDP.

Modelling energy transition risk: The impact of declining energy return on investment (EROI) (2021) 🗎🗎

A number of papers in the field of net energy analysis have argued that declines in energy return on investment (EROI) could lead to increasing energy prices and a fall in economic growth. This paper develops a model (TranSim) which can simulate the economic and financial implications of an energy technology transition involving a reduction in EROI, by combining the stock-flow consistent (SFC) approach with an input-output (IO) model. The TranSim model has the following key features. First, it includes three firm sectors, that produce energy, capital, and other (non-energy, non-capital) goods. Second, an IO model and an Almost Ideal Demand System are integrated into the SFC model. Third, capital vintages have embedded levels of labour productivity and intermediate good requirements that depend on the economic conditions in the period the vintage was produced. Simulations are characterised by an initial increase in output (due to higher investment), followed by periods of recession and below trend growth (due to price inflation and changes to the functional income distribution). The negative effects associated with the transition ? recession, stagnation, stagflation, increasing inequality and asset stranding ? are positively related to the capital intensity of green energy production and reductions in EROI.

The association between the carbon footprint and the socio-economic characteristics of Belgian households (2021) 🗎🗎

Understanding the demand-side drivers and the distribution of greenhouse gas emissions is key to designing fair and effective environmental policies. In this study, we quantify the relationship between the carbon footprint of consumption and socio-economic characteristics of Belgian households. We use a dataset that combines household-level consumption data with an environmentally extended input-output model which quantifies the greenhouse gas emissions embedded in the supply chain of goods and services that households consume. We find that income and household size are the most important determinants of household consumption-related emissions. We also find the emission intensity of household consumption in the lower part of the income distribution is higher than that of richer households because poorer households spend a higher share on emission intensive products, especially energy.

Subnational greenhouse gas and land-based biodiversity footprints in the European Union (2021) 🗎🗎

Insights into subnational environmental impacts and the underlying drivers are scarce, especially from a consumption-based perspective. Here, we quantified greenhouse gas (GHG) emissions and land-based biodiversity losses associated with final consumption in 162 regions in the European Union in 2010. For this purpose, we developed an environmentally extended multi-regional input-output (MRIO) model with subnational European information on demand, production, and trade structures subdivided into 18 major economic sectors, while accounting for trade outside Europe. We employed subnational data on land use and national data on GHG emissions. Our results revealed within-country differences in per capita GHG and land-based biodiversity footprints up to factors of 3.0 and 3.5, respectively, indicating that national footprints may mask considerable subnational variability. The per capita GHG footprint increased with per capita income and income equality, whereas we did not find such responses for the per capita land-based biodiversity footprint, reflecting that extra income is primarily spent on energy-intensive activities. Yet, we found a shift from the domestic to the foreign part of the biodiversity footprints with rising population density and income. Because our analysis showed that most regions are already net importers of GHG emissions and biodiversity losses, we conclude that it is increasingly important to address the role of trade in national and regional policies on mitigating GHG emissions and averting further biodiversity losses, both within and outside the region itself. To further increase the policy relevance of subnational footprint analyses, we also recommend the compilation of more detailed subnational MRIO databases including harmonized environmental data.

Multi-area transboundary pollution problems under learning by doing in Yangtze River Delta Region, China (2021) 🗎🗎

In this paper, we investigate transboundary pollution problems in the Yangtze River Delta Region where emission permits trading and abatement costs under learning by doing. At first, we use the optimal control theory to analyze two-area transboundary pollution problems and give an empirical study for the Shanghai Municipality and Zhejiang Province by using four-order Runge-Kutta method and the authentic economic data. Then, we extend two-area transboundary pollution problems to three-area transboundary pollution problems and also give an empirical study by adopting the authentic economic data of Shanghai Municipality, Zhejiang Province, and Jiangsu Province. Finally, we get a similar conclusion that the abatement cost will decrease with the amelioration of abatement technology.

Carbon Price Impacts on the Chinese Tourism Industry (2021) 🗎🗎

This study simulates the short-run effects of an Emissions Trading Scheme (ETS) and two auxiliary policies on the Chinese tourism industry. The results show that the ETS alone will increases energy prices and have significant adverse impacts on China's economy. The adverse impacts are relatively stronger on the energy sectors than they are on tourism. Two auxiliary policies-a tourism subsidy and a reduced goods and services tax (GST)-are examined as policy options to soften the negative impacts of the ETS. Results show that the tourism-subsidy policy is more effective than the GST reduction policy.

The effects of environmental policies in China on GDP, output, and profits (2021) 🗎🗎

Critics of environmental policies often claim that such policies decrease productivity and profits. The effects of environmental policies on productivity, GDP, output, and profits is in part an empirical question, however, and may vary by firm, industry, sector, and type of policy. This paper examines the effects of environmental policies in China on GDP, industrial output, and new energy sector profits using province-level panel data over the period 2002 to 2013. Our econometric method employs instruments to address the potential endogeneity of the policies. We find that policies involving financial incentives or monetary awards have the potential of increasing the output and/or profits in some energy-related industries or sectors, but potentially at the cost of GDP in non-energy industries or sectors. In contrast, command and control policies and non-monetary awards appear to decrease GDP, output, and/or profits. (C) 2020 Elsevier B.V. All rights reserved.

To pass (or not to pass) through international fuel price changes to domestic fuel prices in developing countries: What are the drivers? (2021) 🗎🗎

This paper attempts to shed light on the drivers causing international fuel prices to be passed through to domestic retail fuel prices. While many developing countries limit the international fuel price pass through to domestic fuel prices, others do not. In the former, large fuel subsidies can emerge, thereby threatening fiscal sustainability, worsening income distribution and setting back efforts to fight climate change. Against this backdrop, we examine the factors that determine whether governments allow international fuel price changes to be passed through to domestic prices in developing countries using a dataset spanning 109 developing countries from 2000 to 2014. The paper finds that the pass-through is higher when changes in international prices are moderate and less volatile. In addition, the flexibility of the pricing mechanism allows for higher pass-through while exchange rate depreciation and lower retail fuel prices in neighboring countries inhibit it. The econometric results also underscore the fact that countries with inflation tend to experience lower pass-through, whereas those with high public debt exhibit larger pass-through. Finally, no evidence is found that political variables or environmental policies matter with regard to fuel price dynamics in the short-term. These findings, which are consistent across fuel products (gasoline, diesel and kerosene), allow us to draw important policy lessons for fuel subsidy reforms.

The economic and environmental costs and benefits of the renewable fuel standard (2021) 🗎🗎

Mandates, like the renewable fuel standard (RFS), for biofuels from corn and cellulosic feedstocks, impact the environment in multiple ways by affecting land use, nitrogen (N)-leakage, and greenhouse gas (GHG) emissions. We analyze the differing trade-offs these different types of biofuels offer among these multi-dimensional environmental effects and convert them to a monetized value of environmental damages (or benefits) that can be compared with the economic costs of extending these mandates over the 2016-2030 period. The discounted values of cumulative net benefits (or costs) are then compared to those with a counterfactual level of biofuels that would have been produced in the absence of the RFS over this period. We find that maintaining the corn ethanol mandate at 56 billion l till 2030 will lead to a discounted cumulative value of an economic cost of $199 billion over the 2016-2030 period compared to the counterfactual scenario; this includes $109 billion of economic costs and $85 billion of net monetized environmental damages. The additional implementation of a cellulosic biofuel mandate for 60 billion l by 2030 will increase this economic cost by $69 billion which will be partly offset by the net discounted monetized value of environmental benefits of $20 billion, resulting in a net cost of $49 billion over the 2016-2030 period. We explore the sensitivity of these net (economic and environmental) costs to alternative values of the social costs of carbon and nitrogen and other technological and market parameters. We find that, unlike corn ethanol, cellulosic biofuels can result in positive net benefits if the monetary benefits of GHG mitigation are valued high and those of N-damages are not very high.

Future changes in consumption: The income effect on greenhouse gas emissions (2021) 🗎🗎

The scale and patterns of household consumption are important determinants of environmental impacts. Whilst affluence has been shown to have a strong correlation with environmental impact, they do not necessarily grow at the same rate. Given the apparent contradiction between the sustainable development goals of economic growth and environmental protection, it is important to understand the effect of rising affluence and concurrent changing consumption patterns on future environmental impacts. Here we develop an econometric demand model based on the data available from a global multiregional input-output dataset. We model future household consumption following scenarios of population and GDP growth for 49 individual regions. The greenhouse gas (GHG) emissions resulting from the future household demand is then explored both with and without consideration of the change in expenditure over time on different consumption categories. Compared to a baseline scenario where final demand grows in line with the 2011 average consumption pattern up until 2030, we find that changing consumer preferences with increasing affluence has a small negative effect on global cumulative GHG emissions. The differences are more profound on both a regional and a product level. For the demand model scenario, we find the largest decrease in GHG emissions for the BRICS and other developing countries, while emissions in North America and the EU remain unchanged. Decreased spending and resulting emissions on food are cancelled out by increased spending and emissions on transportation. Despite relatively small global differences between the scenarios, the regional and sectoral wedges indicate that there is a large untapped potential in environmental policies and lifestyle changes that can complement the technological transition towards a low-emitting society. (c) 2021 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license (http:// creativecommons.org/licenses/by/4.0/).

Does carbon pricing reduce emissions? A review of ex-post analyses (2021) 🗎🗎

Carbon pricing has been hailed as an essential component of any sensible climate policy. Internalize the externalities, the logic goes, and polluters will change their behavior. The theory is elegant, but has carbon pricing worked in practice? Despite a voluminous literature on the topic, there are surprisingly few works that conduct an ex-post analysis, examining how carbon pricing has actually performed. This paper provides a meta-review of ex-post quantitative evaluations of carbon pricing policies around the world since 1990. Four findings stand out. First, though carbon pricing has dominated many political discussions of climate change, only 37 studies assess the actual effects of the policy on emissions reductions, and the vast majority of these are focused on Europe. Second, the majority of studies suggest that the aggregate reductions from carbon pricing on emissions are limited-generally between 0% and 2% per year. However, there is considerable variation across sectors. Third, in general, carbon taxes perform better than emissions trading schemes (ETSs). Finally, studies of the EU-ETS, the oldest ETS, indicate limited average annual reductions-ranging from 0% to 1.5% per annum. For comparison, the IPCC states that emissions must fall by 45% below 2010 levels by 2030 in order to limit warming to 1.5 degrees C-the goal set by the Paris Agreement (Intergovernmental Panel on Climate Change 2018). Overall, the evidence indicates that carbon pricing has a limited impact on emissions.

The short-term price effects and transmission mechanism of CO2 cost pass-through in China: A partial transmission model (2021) 🗎🗎

CO2 cost pass-through due to environmental policies will lead to an increase in general prices. Because of factors such as the market structure and technology level, the capability of cost pass-through is significantly different among sectors. This topic is related to the central environmental policies regarding who will bear the CO2 cost burden. To analyze the short-term impacts of CO2 cost pass-through on general prices and the transmission mechanism in China, this study simulates a carbon tax that will be levied in 2020 using a partial input-output model and a complex network theory. Two scenarios are compared: a complete transmission, in which CO2 costs are 100% transferred to downstream industries, and a partial transmission, in which CO2 costs are partially transferred. The results show that the cost pass-through capabilities of sectors vary significantly. Coal mining and service are the source of inflation and have the strongest cost pass-through capability. Second, the impacts of CO2 cost pass-through on general prices are significantly different between a complete transmission scenario and a partial transmission scenario. The average price increase in the partial transmission scenario is 0.24%, which is less than the average price increase of 0.58% in the complete transmission scenario. Finally, this study analyzes the price transmission mechanism between sectors in the process, including key sector analysis, critical paths analysis, and community analysis. Our research is valuable for further studies on the welfare effects of the carbon tax on producers and consumers.

Dynamic interactive effect and co-design of SO2 emission tax and CO2 emission trading scheme (2021) 🗎🗎

To solve the different environmental problems caused by the over-use of fossil fuels, multiple environmental policies currently coexist. How these environmental policies interact with each other and how to optimise them are a few issues that need to be resolved urgently in practice. We established an environmental dynamic stochastic general equilibrium model (E-DSGE) to analyse the dynamic interactive effects of the SO2 emission tax and CO2 emission trading in China and the optimal design of these two environmental policies. We have calibrated the model based on China's actual data. The results indicate that synergistic emission reduction effects have led to an overlap between the two policies, because both SO2 and CO2 emissions share a common root-fossil fuels. Currently there is no obvious conflict between them. When the SO2 emission tax is levied at 12.6 CNY/kg, the CO2 emission cap should be lower than 76.1%. Second, the synergistic emission reduction effect between CO2 emission trading and the SO2 emission tax can enhance the automatic stabilisation function of both. Third, we suggest to optimise both policies pro-cyclically. However, if either of these two policies is ineffective, the optimal SO2 emission tax will be counter-rather than pro-cyclical.

Firm-specific responses to energy policies in Dutch horticulture (2021) 🗎🗎

Reducing the usage of fossil fuels is a central issue in ongoing policy debates. This in particular holds for Dutch horticulture, given its energy-intensive production. We analyse differences in energy usage and price responsiveness of horticultural firms by estimating energy demand functions using a Bayesian random coefficient model. Beyond, the effects of a proposed energy tax are assessed. Allowing for firm-specific energy price coefficients gives a better model fit compared to conventional models with fixed slope parameters. This confirms that firms respond differently to energy prices, which is taken into account in simulating the effects of more restrictive energy policies. The results show that larger-sized firms use less gas per square meter yet also point at a considerable spread in additional energy expenses between firms.

Business cycle fluctuations and emissions: Evidence from South Asia (2021) 🗎🗎

CO2 emissions and GDP fluctuations are believed to be strongly related. However, empirical evidence from different parts of the world other than United States, is quite scarce. Moreover, the existing studies focused on CO2 and ignored other important emissions, like methane (CH4), nitric oxide (NO), and Greenhouse Gases (GHGs). For South Asian countries, this study documents the stylized facts between key emissions and GDP also including the relationship with its major components. It is found that CO2 emissions are procyclical and highly volatile, but the behaviour of other emissions changes from country to country. CH4, NO and GHGs are procyclical in India but not in Bangladesh. In Pakistan, there is positive correlation between cyclical components of GHGs and output from services and agriculture sector. Furthermore, using Structural Vector Autocorrelation, it is estimated that response of the emissions to technological shock is also different for different countries. In India and Bangladesh, improving technology will result in decreasing while in Pakistan and Sri Lanka, it will result in increasing the CO2 emissions permanently. However, the impact of technology shock on GHGs emissions in the latter two countries will be temporary. These outcomes indicate that each country should formulate effective environmental policies keeping in view its own economic realities. (c) 2021 Elsevier Ltd. All rights reserved.

The influence of climate change on the demand for ethanol (2021) 🗎🗎

The influence of climate change on US corn ethanol energy demand by commercial, industry and transportation is examined from 1970 to 2017 using a Translog cost function. The sectorial compensated demand for energy, price, and pure technical substitution elasticities between the three sectors is computed using parameter coefficients from a system of demand shares equations. The commercial sector price is used to normalize the equations and hold the homogeneity and symmetry conditions. Both the U.S. transportation and industry sectors' consumption of ethanol as energy are affected by the climatic factors. The transportation sector's consumption is affected by only the variance of precipitation while that of the industry is affected by both the mean and variance of temperature, and variance of precipitation. All the three sectors have very little flexibility for economic substitution to reduce ethanol use due to very weak technical substitution among sectors except industrial energy for transportation where expenditure is reduced by about 1.3% for a 10% rise in prices. The commercial and industrial sectors' ethanol demand can only be increased through greater improvement in technology. Feedstock availability, due to high consumptive use water has negative effect on demand. (c) 2020 Elsevier Ltd. All rights reserved.

Aiming for Carbon Neutrality: Which Environmental Taxes Does Spain Need by 2030? (2021) 🗎🗎

The Green Deal is a new European strategic plan aiming to achieve carbon neutrality in 2050 with a 55%-reduction in emissions by 2030 as an intermediate target. In the next three decades European policymakers will use a wide set of policy levers to achieve these targets, including taxes on fossil fuels and carbon prices. In this context, this study uses a competitive general equilibrium model for a small open economy to identify the optimal tax-mix for oil, natural gas, and coal in Spain for a given target of carbon emissions from energy use. The ambitious environmental target for 2030 requires a tax increase of around 50 percentage points in the case of oil, 200 percentage points in the case of natural gas, and 700 percentage points in the case of coal. Alternatively, Spain could replace those taxes on fossil fuels by a carbon tax of 150 (SIC)/tCO2, being this level a reference on the carbon price needed to achieve the new European target. This study shows that an optimal mix of taxes or a carbon tax lead to approximately the same welfare loss in the long run, although welfare losses during the transition are slightly higher in the case of the carbon tax when the emissions target is very ambitious. A useful policy insight from this paper is that the current tax rates on fossil fuels are inconsistent with the new European target and, therefore, significant increases are needed, or a considerable higher carbon price is required.

Is the service industry really low-carbon? Energy, jobs and realistic country GHG emissions reductions (2021) 🗎🗎

In accounting for carbon emissions, the conventional wisdom is that the service industry is ?emissions light?, but this is not supported when goods and other inputs to services production are included. We examine greenhouse gas emissions in detail for Australia, Germany, Italy, the UK and USA and find similarities for the service industry. Taking the UK as a case study, we apply the 7see system dynamics modelling approach that accounts for both physical capacity limits and empirical data from economic activity. Service emissions are more than doubled when imported inputs are included in a consumption basis, and that UK emissions would reduce only to 42 million tonnes annually by 2050. Tackling service emissions requires additional efficiency measures for energy-use and goods-use and considering the emission intensities of exporting countries for imports. The four key goods underpinning the UK service industry that are continuing to grow are electronic, pharmaceutical, materials and machinery. Energy policy can only deliver net-zero emissions by treating the service industry as a single unified entity, especially important because it provides the majority of employment.

Climate Change Policies and the Carbon Tax Effect on Meat and Dairy Industries in Brazil (2021) 🗎🗎

This study analyzes the impacts of reducing greenhouse gas (GHG) emissions on the meat and dairy industries. To achieve this goal, the Global Trade Analysis Project (GTAP) database was used in a Computable General Equilibrium (CGE) setting, which allows for the inclusion of carbon taxes and the definition of four alternative environmental policies scenarios using both Global Warming Potential (GWP) and Global Temperature Potential (GTP) as GHG emissions measures. All scenarios analyze the main effects of carbon-based tax economic instruments on the industry and national production, trade, and emissions, comparing the results for different measures of GHG, GWP, and GTP from the Greenhouse Gas Emissions Estimation System (SEEG) sectoral Brazilian emissions database. In contrast with other industries, relatively lower taxes on the meat and dairy industries seem to be the most adequate in terms of cost distribution in the Brazilian economic structure when only the GWP measure is considered. Urban activities and less-methane-intensive industries benefit from climate change policies designed using GWP-based rather than GTP-based carbon taxes. The article also highlights the importance of a gradual introduction of carbon taxes, allowing the most vulnerable industries a transition moment to adopt clean technologies and/or redirect economic activity to less-GHG-emitting segments.

Environmental efficiency of economic instruments in transport in EU countries (2021) 🗎🗎

The main objective of this article is to examine how individual policy instruments contribute to reducing transport carbon emissions from transport in groups of EU countries. Multiple panel regression analysis was chosen as the research method, the impact of transport tax revenues on GHG emissions being expected to be negative. The results suggest that the influence of particular tax revenues on emissions varies between countries, differences being partly due to national legislations. Focusing on the explanatory variable of the price of aviation emissions allowances, the analysis supports our research hypothesis. The findings indicate that rising allowance prices contribute to the reduction of emissions, an increase in the EUAA price by (sic)1 typically partially corresponding to a decrease in GHG emissions by 7.9 kg of CO2 per capita. Further research should facilitate the selection of the most effective economic instruments and their mix at EU level.

Green policy under the competitive electricity market: An agent-based model simulation in Shanghai (2021) 🗎🗎

China has begun a new round of electricity market reform since 2015, aiming to transform the regulated form into a competitive one. Since the generation cost of clean energy is still relatively high compared to coal-fired power plants, the major source of the energy sector in China, the environmental outcomes from market reform would remain uncertain. Therefore, green policies play a critical role during the process of reform and hence would determine whether China can achieve the goal of carbon-neutral in 2060. In light of these concerns, this paper performed a simulation study based on the agent-based model (ABM) to analyze the market performance and environmental conditions after reform. Our results demonstrate that given current cost disadvantages, the market share will flow to coal-fired power plants in the competitive electricity market without the support of green policies, resulting in the increase of CO2, NOX, SO2, and smoke emissions by 4.85 %, -1.7 %, 6.48 %, and 6.86 %. Further scenario analysis shows that to improve such environmental outcomes, policies should focus on pushing the replacement of coal-fired energy, either by renewable or gas energy. The simulation results of green policy scenarios demonstrate significant co-benefits, that carbon and other pollution emissions will decrease simultaneously. Despite the environmental gain from green policies, results of the policy efficiency analysis indicates that the FIT on renewable energy is the least effective, while pollution tax turns to be the most effective. Our results imply that green policies should be well considered when constructing the competitive electricity market in China, to effectively achieve both the national carbon-neutral and local environmental goals.

On influence of emissions trading on efficiency of the EU national steel sectors (2021) 🗎🗎

Environmental policy in the European Union is a hot topic for both practitioners and researchers. Their interests are attracted mainly by the main tool of this policy-emissions trading within the EU ETS. In literature focusing on the impacts of the EU ETS, the EU is usually considered to be a compact unit and its structure is omitted there. In particular, the impacts on a single company (regardless its geographical location), on a sector of industry (regardless the member countries), or on some subset of the involved companies with respect to non-EU competitors are often explored. However, through the eyes of national governments, it is vital for the countries to keep their national industrial sectors competitive not only against companies from countries outside the EU but also from other EU countries. This paper focuses on the influence of the EU ETS on the national steel sectors in the EU and their competitiveness. The hybrid PROMETHEE-DEA approach is used to assess how the price of emission allowance and grandfathering within the EU ETS impact the technical efficiency and competitiveness of these national sectors. The results of this study show that the volatile allowance price influences the efficiency and grandfathering affects the competitiveness of the EU national steel sectors.

Any Signs of Green Growth? A Spatial Panel Analysis of Regional Air Pollution in South Korea (2021) 🗎🗎

Focusing on air emissions in South Korean provinces, we investigate whether economic growth has become greener since the implementation of the national green growth strategy in 2009. Given the relevance of regional elements in the economic and environmental policies, the focus lies on spatial aspects. That is, spillovers from nearby provinces are controlled for in a SLX model by means of the Han-Phillips estimator for dynamic panel data. Our results suggest mainly the existence of inverted N-shaped Environmental Kuznets curves for sulfur oxides (SOX) and total suspended particles (TSP). As the curves initially decrease strongly with increasing income, the main cleanup is achieved with the mean income level. However, abatement of the remaining TSP emissions only takes place at higher income levels. While the fixed effects estimations indicate that per capita SOX and TSP emissions have been significantly lower since 2009, the effects vanish once spatial interactions are taken into account and no evidence is found that regional economic growth has become greener. Apart from economic growth, population density and energy consumption are the main drivers of emission changes, with the latter having robust spatial spillovers. The respective spatial interactions decrease with increasing distance and become insignificant after 150 km.

Implications of the distribution of German household environmental footprints across income groups for integrating environmental and social policy design (2021) 🗎🗎

The distribution of German household environmental footprints (EnvFs) across income groups is analyzed by using EXIOBASE v3.6 and the consumer expenditure survey of 2013. Expenditure underreporting is corrected by using a novel method, where the expenditures are modeled as truncated normal distribution. The focus lies on carbon (CF) and material (MF) footprints, which for average German households are 9.1 +/- 0.4 metric tons CO(2)e and 10.9 +/- 0.6 metric tons material per capita. Although the lowest-income group has the lowest share of transportation in EnvFs, at 10.4% (CF) and 3.9% (MF), it has the highest share of electricity and utilities in EnvFs, at 39.4% (CF) and 16.7% (MF). In contrast, the highest-income group has the highest share of transportation in EnvFs, at 20.3% (CF) and 12.4% (MF). The highest-income group has a higher share of emissions produced overseas (38.6% vs. 34.3%) and imported resource use (69.9% vs. 66.4%) compared to the average households. When substituting 50% of imported goods with domestic ones in a counterfactual scenario, this group only decreases its CF by 2.8% and MF by 5.3%. Although incomes in Germany are distributed more equally (Gini index 0.28), the German household CF is distributed less equally (0.16). A uniform carbon tax across all sectors would be regressive (Suits index -0.13). Hence, a revenue recycling scheme is necessary to alleviate the burden on low-income households. The overall carbon intensity shows an inverted-U trend due to the increasing consumption of carbon-intensive heating for lower-income groups, indicating a possible rebound effect for these groups. This article met the requirements for a gold - gold JIE data openness badge described at http://jie.click/badges.

Climate policies after Paris: Pledge, Trade and Recycle. Insights from the 36th Energy Modeling Forum Study (EMF36) (2021) 🗎🗎

This article summarizes insights from the 36th Energy Modeling Forum study (EMF36) on the magnitude and distribution of economic adjustment costs of greenhouse gas emission reduction targets. Under the Paris Agreement, countries have committed to emission reduction targets - so-called Nationally Determined Contributions (NDCs) - in order to combat global warming. The study suggests that aligning NDCs with the commonly agreed 2 degrees C temperature target will induce global economic costs of roughly 1% in 2030. However, these costs are unevenly distributed across regions. Countries exporting fossil fuels are most adversely affected from the transition towards a low-carbon economy. In order to reduce adjustment costs at the global and regional level, comprehensive emissions trading which exploits least-cost abatement options is strongly desirable to avoid contentious normative debates on equitable burden sharing. Lump-sum recycling of revenues from emissions pricing, in equal amounts to every household, appeals as an attractive strategy to mitigate regressive effects and thereby improving the social acceptability of stringent climate policy.