Linking the Swiss Emissions Trading System with the EU ETS: Economic Effects of Regulatory Design Alternatives

Frank Vöhringer

Swiss Journal of Economics and Statistics (SJES), 2012, vol. 148, issue II, 167-196

Abstract: The Swiss government intends to link the Swiss Emissions Trading System to the EU ETS after 2012. Employing GENESwIS, a dynamic computable general equilibrium (CGE) model of the Swiss economy, we investigate the macroeconomic and sectoral effects of a post-2012 Swiss ETS with linking to the EU ETS. It is the first such CGE analysis for Switzerland with disaggregated sectors according to magnitude of CO2 emissions from installations, which allows distinguishing ETS installations from non-ETS installations in the same sector. The reference scenario represents the announced post-2012 Swiss climate policy without ETS, implying a GHG emissions target for 2020 of -20% with respect to 1990. In the ETS policy scenarios, regulatory issues include participation thresholds and the share of auctioned permits. We show that the Swiss ETS reduction targets are not ambitious when declining baseline emissions are assumed. Thus, most ETS installations profit from an ETS, while non-ETS sectors have to reduce more emissions (and pay a higher CO2 tax). In the context of the simulated Swiss ETS scenarios, we find that distributional consequences of regulatory choices are far more important than efficiency considerations.

Keywords: Emissions trading system; climate policy; energy policy; Switzerland; computable general equilibrium model (search for similar items in EconPapers)
JEL-codes: D58 Q54 Q58 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sjes.ch/papers/2012-II-4.pdf (application/pdf)

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:ses:arsjes:2012-ii-4

Access Statistics for this article

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

More articles in Swiss Journal of Economics and Statistics (SJES) from Swiss Society of Economics and Statistics (SSES) Contact information at EDIRC.
Bibliographic data for series maintained by Kurt Schmidheiny ().