Showing papers by "Christoph Böhringer published in 2010"

Green promotes the dirtiest: on the interaction between black and green quotas in energy markets

Abstract: Tradable black (CO2) and green (renewables) quotas gain in popularity and stringency within climate policies of many OECD countries. The overlapping regulation through both instruments, however, may have important unintended consequences. Based on theoretical analysis we show that a green quota imposed on top of a black quota promotes power production by the dirtiest technologies as compared to a black quota regime only.

The Global Effects of Subglobal Climate Policies

Abstract: Individual countries are in the process of legislating responses to the challenges posed by climate change. The prospect of rising carbon prices raises concerns in these nations about the effects on the competitiveness of their own energy-intensive industries and the potential for carbon leakage, particularly leakage to emerging economies that lack comparable regulation. In response, certain developed countries are proposing controversial trade-related measures and allowance allocation designs to complement their climate policies. Missing from much of the debate on trade-related measures is a broader understanding of how climate policies implemented unilaterally (or subglobally) affect all countries in the global trading system. Arguably, the largest impacts are from the targeted carbon pricing itself, which generates macroeconomic effects, terms-of-trade changes, and shifts in global energy demand and prices; it also changes the relative prices of certain energy-intensive goods. This paper studies how climate policies implemented in certain major economies (the European Union and the United States) affect the global distribution of economic and environmental outcomes, and how these outcomes may be altered by complementary policies aimed at addressing carbon leakage.

The Costs of Compliance: A CGE Assessment of Canada’s Policy Options under the Kyoto Protocol

Abstract: Canada has committed itself under the Kyoto Protocol to reduce greenhouse gas emissions between 2008 and 2012 on average by six per cent from the base 1990 level. As of 2009, however, Canada’s greenhouse gas emissions are far above its 1990 level which calls for stringent short-term policy measures if Canada is to meet its legally binding commitment. This paper uses a multi-region, multi-commodity static general equilibrium model to quantify the economic impacts of alternative compliance strategies for Canada in the context of climate policies undertaken by other Kyoto parties. The numerical results confirm fears by Canadian policymakers of substantial economic adjustment costs should Canada fulfill its Kyoto commitments solely through domestic action. However, a rigorous use of the project-based CDM on top of international emissions trading could allow Canada to live up to its international climate policy commitment at politically much more tolerable costs.

Economic effects of VAT reforms in Germany

Abstract: In the tax policy debate, differentiation of value-added taxes is often justified by distributional concerns. Our quantitative analysis for Germany indicates that such concerns are misplaced. We find that the abolition of VAT differentiation has only negligible redistributive effects. Instead, reduced VAT are found to act as industry-specific subsidies. Whereas the overall welfare effects of pure VAT reforms are very small, a revenue-neutral introduction of a harmonised VAT combined with reductions in the marginal income tax rates or social security contributions turns out to produce substantial welfare gains for all households.

1990 bis 2010: Eine Bestandsaufnahme von zwei Jahrzehnten europäischer Klimapolitik

Abstract: : Climate change ranks high on the policy agenda of the European Union (EU) which considers itself as a leading force in the battle against global warming. The EU is committed to the objective of limiting the rise in global average temperature to no more than 2° Celsius above pre-industrial levels in order to hedge against dangerous anthropogenic interference with the climate system. In this paper, we provide a critical appraisal of EU climate policy over the last two decades. Given the global public good properties of climate protection we derive guidelines for sound unilateral action and evaluate contemporary EU climate policy against these guidelines. We find that – while the EU must be praised for pushing international agreements and going ahead with ambitious emission reduction targets – the implementation of EU climate policies is likely to make climate protection much more costly than necessary.

Greening Electricity More Than Necessary: On the Excess Cost of Overlapping Regulation in EU Climate Policy

Abstract: After the failure of the United Nations climate change conference at Copenhagen the EU is under domestic pressure to justify ambitious unilateral emissions reduction targets. Cost efficiency of EU-wide emission abatement becomes increasingly important in order to sustain EU leadership in climate policy. We argue that administered EU targets for renewable energies are doomed to make emission reduction much more costly than necessary and therfore could rather hinder than promote public support to unilateral action.