Growth impacts of Swiss steering-based climate policies

Adriana Marcucci () and Lin Zhang
Additional contact information
Adriana Marcucci: ETH Zurich, Center of Economic Research

Swiss Journal of Economics and Statistics, 2019, vol. 155, issue 1, 1-13

Abstract: Abstract This paper studies the growth impacts of realizing two long-term carbon targets in Switzerland (reducing CO2 emissions in 2050 by 72% and 80% relative to 1990 levels) with alternative steering-based climate policies that include a uniform tax on the whole economy and differentiated tax schemes. For this analysis, we use the Computable Induced Technical change and Energy (CITE) model, a computable general equilibrium (CGE) model with endogenous growth. We find that achieving the climate targets could lead to a slight decrease in utility and an increase in investments through the shift of labor from manufacturing to research. Higher investments coming from higher innovation could compensate the reduction in output due to the carbon policies, leading to relatively unaffected economic output. The economic structure adjusts following three drivers: energy intensity, substitutability from energy in the production of the intermediate varieties, and the relative attractiveness of research. Moreover, the results from the CITE model show that the economy-wide carbon tax is the most effective option when we consider the effects on utility. Differentiating the sectors regulated by the emission trading system (ETS) has relatively low impact while applying lower taxes on transport fuels results in lower utility driven by inefficiencies in the sectoral mitigation efforts. Finally, we find that the effects of increasing the stringency of the target (in terms of foregone utility) are independent from the policy instrument.

Keywords: Endogenous growth; Swiss climate policy; CGE; Differentiated taxes (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1186/s41937-019-0043-5 Abstract (text/html)

Related works:
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:spr:sjecst:v:155:y:2019:i:1:d:10.1186_s41937-019-0043-5

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/41937

DOI: 10.1186/s41937-019-0043-5

Access Statistics for this article

Swiss Journal of Economics and Statistics is currently edited by Marius Brülhart

More articles in Swiss Journal of Economics and Statistics from Springer, Swiss Society of Economics and Statistics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().