Climate change policy in European countries and its effects on industry

Stef Proost and Denise Van Regemorter ()
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Denise Van Regemorter: K.U.Leuven, C.E.S., Energy, Transport and Environment

Energy, Transport and Environment Working Papers Series from KU Leuven, Department of Economics - Research Group Energy, Transport and Environment

Abstract: In this paper we discuss the effects of different climate change policies on industrial activity. We compare the effects of carbon taxes, grandfathered permits, technology standards and voluntary agreements. We survey first the insights from economic theory and from model experiments for the US. Next we use a general equilibrium model, to assess the effect of different climate change policies on industrial activity per sector and per member country in the EU. We pay particular attention to the effects of policies where EU member states exempt their energy-intensive sectors from abatement efforts. The main findings are that, in the EU, the effects on industrial activity and the welfare costs of carbon abatement policies that use tradeable permits or carbon taxes are small when no industrial sectors are exempted. When one member country exempts its energy intensive sector, this will have a small positive impact on its activity level but will generate an extra welfare cost for the EU.

Keywords: environmental policy; taxes; marketable permits; industry; climate change policy (search for similar items in EconPapers)
Pages: 24 pages
Date: 2003-03
New Economics Papers: this item is included in nep-eec and nep-ene
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Climate Change Policy in European Countries and its effects on industry (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:etewps:ete0305

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