What a difference carbon leakage correction makes!

Thomas Grebel

Journal of Evolutionary Economics, 2019, vol. 29, issue 3, No 6, 939-971

Abstract: Abstract In this paper, we investigate the effect of carbon leakage correction when turning from a production-based to a consumption-based approach. We consider six different regulatory regimes. For calculating carbon leakage corrections, we employ the Leontief Inverse derived from WIOD input/output tables. To account for country-specific characteristics we use OECD data. As modelling technique, we apply a non-parametric productivity estimation approach (Data Envelopment Analysis) to calculate relative efficiency scores of countries’ environmental performance to take their heterogeneity into account. The results suggest that irrespective of the chosen policy regime, the correction for carbon leakage will always lead to a significant reduction of emissions. The average effect of leakage correction amounts to 37% less CO2 emissions.

Keywords: Energy efficiency; CO2-emissions; DEA; Benchmarking (search for similar items in EconPapers)
JEL-codes: Q48 Q56 Q58 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s00191-019-00629-8

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