Europe beyond Coal - An Economic and Climate Impact Assessment

Christoph Boehringer (boehringer@uol.de) and Knut Einar Rosendahl
Authors registered in the RePEc Author Service: Christoph Böhringer

No V-430-20, Working Papers from University of Oldenburg, Department of Economics

Abstract: Several European countries have decided to phase out coal power generation. Emissions from electricity generation are already regulated by the EU Emissions Trading System (ETS), and in some countries like Germany the phaseout of coal will be accompanied with cancellation of emissions allowances. In this paper we examine the consequences of phasing out coal, both for the broader economy, the electricity sector, and for CO2 emissions. We show analytically how the welfare impacts for a phaseout region depend on i) whether and how allowances are canceled, ii) whether other countries join phaseout policies, and iii) terms-of-trade effects in the ETS market. Based on numerical simulations with a computable general equilibrium model for the European economy, we quantify the economic and environmental impacts of alternative phaseout scenarios, considering both unilateral and multilateral phaseout. We find that terms-of-trade effects in the ETS market play an important role for the welfare effects across EU member states. For Germany, coal phaseout combined with unilateral cancellation of allowances is found to be welfare-improving if the German citizens value emissions reductions at 65 Euro per ton or more.

Keywords: coal phaseout; emissions trading; electricity market (search for similar items in EconPapers)
Date: 2020-07, Revised 2020-07
New Economics Papers: this item is included in nep-cmp, nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Oldenburg Working Papers V-430-20

Downloads: (external link)
http://www.uni-oldenburg.de/fileadmin/user_upload/ ... ete/vwl/V-430-20.pdf First version, 2020 (application/pdf)

Related works:
Journal Article: Europe beyond coal – An economic and climate impact assessment (2022)
Working Paper: Europe beyond Coal - An Economic and Climate Impact Assessment (2020)
Working Paper: Europe Beyond Coal – An Economic and Climate Impact Assessment (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:old:dpaper:430

Access Statistics for this paper

More papers in Working Papers from University of Oldenburg, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Catharina Schramm (catharina.schramm@uni-oldenburg.de).