The environmental and economic effects of European emissions trading

Claudia Kemfert, Michael Kohlhaas, Truong Truong () and Artem Protsenko

Climate Policy, 2006, vol. 6, issue 4, 441-455

Abstract: In this article, we analyse the effects of emissions trading in Europe, with special reference to Germany. We look at the value of the flexibility gained by trading compared to fixed quotas. The analysis is undertaken with a modified version of the GTAP-E model using the latest GTAP version 6 database. It is based on the national allocation plans (NAP) as submitted to and approved by the EU. We find that, in a regional emissions trading scheme, Germany, Great Britain and the Czech Republic are the main sellers of emissions permits, while Belgium, Denmark, Finland and Sweden are the main buyers. The welfare gains from regional emissions trading-for the trading sectors only-are largest for Belgium, Denmark and Great Britain; smaller for Finland and Sweden, and smallest for Germany and other regions. When we take into account the economy-wide and terms-of-trade effects of emissions trading, however, (negative) terms-of-trade effects can offset the (positive) allocative efficiency gains for the cases of the Netherlands and Italy, while all other regions end up with positive net welfare gains. All regions, however, experienced increases in real GDP as a result of regional emissions trading.

Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://hdl.handle.net/10.1080/14693062.2006.9685612 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Environmental and Economic Effects of European Emissions Trading (2005)
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:taf:tcpoxx:v:6:y:2006:i:4:p:441-455

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/tcpo20

DOI: 10.1080/14693062.2006.9685612

Access Statistics for this article

Climate Policy is currently edited by Professor Michael Grubb

More articles in Climate Policy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().