The climate implications of government support in aluminium smelting and steelmaking: An Empirical Analysis

Grégoire Garsous, Donal Smith and Dylan Bourny

No 276, OECD Trade Policy Papers from OECD Publishing

Abstract: This report combines multiple novel datasets to provide evidence that government support has contributed to increased carbon emissions from aluminium and steelmaking activities through an increase in production output and by shifting production to more emission intensive plants. While improvements in technology have driven overall emissions downward, there is no evidence that government support in this sector has been targeted at, or has contributed to, developing techniques that improve environmental performance. Removing such support could therefore contribute to a cost-effective decarbonisation strategy. For example, removing government support to aluminium smelting and steel making worldwide would reduce carbon emissions by 75% more than the reduction observed in 2020 resulting from COVID-related restrictions. In addition, the removal of such support would free up scarce public resources for alternative uses.

Keywords: Emissions-intensive industries; Greenhouse gas emissions (search for similar items in EconPapers)
JEL-codes: H24 H32 L61 Q5 (search for similar items in EconPapers)
Date: 2023-10-27
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:276-en

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