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The Impact of Unilateral Climate Policy with Endogenous Plant Location and Market Size Asymmetry AgEcon
Sanna-Randaccio, Francesca; Sestini, Roberta.
This paper analyses the impact of unilateral climate policy on firms’ international location strategies in emission-intensive sectors, when countries differ in terms of market size. The cases of partial and total relocation via foreign direct investment are separately considered. A simple international duopoly model highlights the differences between short-term and long-term effects. In the short-term no change in location is a likely outcome in very capital-intensive sectors, and when there is a strategy shift this takes the form of partial instead of total relocation. In the long-run total relocation becomes a feasible outcome. However we found that, when tighter mitigation measures are introduced by the larger country and unit transport cost is high,...
Tipo: Working or Discussion Paper Palavras-chave: Foreign Direct Investment; Carbon Leakage; Climate Policy; Relocation; Transport Costs; Welfare; Environmental Economics and Policy; F12; F23; Q58.
Ano: 2010 URL: http://purl.umn.edu/94789
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How CO2 Capture and Storage Can Mitigate Carbon Leakage AgEcon
Quirion, Philippe; Rozenberg, Julie; Sassi, Olivier; Vogt-Schilb, Adrien.
Most CO2 abatement policies reduce the demand for fossil fuels and therefore their price in international markets. If these policies are not global, this price decrease raises emissions in countries without CO2 abatement policies, generating “carbon leakage”. On the other hand, if the countries which abate CO2 emissions are net fossil fuel importers, they benefit from this price decrease, which reduces the abatement cost. In contrast, CO2 capture and storage (CCS) does not reduce fossil fuel demand, therefore it generates neither this type of leakage nor this negative feedback on abatement costs. We quantify these effects with the global hybrid general equilibrium model Imaclim-R and show that they are quantitatively important. Indeed, for a given...
Tipo: Working or Discussion Paper Palavras-chave: CO2 Capture and Storage; Carbon Leakage; Environmental Economics and Policy; Q5; Q58.
Ano: 2011 URL: http://purl.umn.edu/101293
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How to Design a Border Adjustment for the European Union Emissions Trading System? AgEcon
Monjon, Stephanie; Quirion, Philippe.
Border adjustments are currently discussed to limit the possible adverse impact of climate policies on competitiveness and carbon leakage. We discuss the main choices that will have to be made if the European Union implements such a system alongside with the EU ETS. Although more analysis is required on some issues, on others some design options seem clearly preferable to others. First, the import adjustment should be a requirement to surrender allowances rather than a tax. Second, the general rule to determine the amount of allowances per ton imported should be the product-specific benchmarks that the European Commission is currently elaborating for a different purpose (i.e. to determine the amount of free allowances). Third, this obligation should apply...
Tipo: Working or Discussion Paper Palavras-chave: Carbon Leakage; Border Adjustment; Border Tax Adjustment; EU ETS; Competitiveness; Environmental Economics and Policy; Q38.
Ano: 2010 URL: http://purl.umn.edu/60684
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The Effects of Unilateral Reduction of Greenhouse Gas Emissions on the U.S. Agriculture AgEcon
Tokovenko, Oleksiy; Koo, Won W..
This study analyses potential adverse effects of unilateral increase in GHG emission standards. The single good two regions partial equilibrium model of international trade is used to derive and interpret the conditions under which such an increase will lead to a reduction in a total level of GHG emission. We found that improvement in the global GHG emission level will be observed if the response of the home country abatement level is more elastic than that of the foreign country by the factor of the ratio of initial foreign to domestic marginal emission intensities. It is also shown that in the large industry case, the appropriate factor is adjusted by the measure of the relative market influence of two industries. The study concludes that a unilateral...
Tipo: Conference Paper or Presentation Palavras-chave: Emission Regulation; Carbon Leakage; International Trade; Environmental Economics and Policy; International Relations/Trade.
Ano: 2011 URL: http://purl.umn.edu/103847
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