Showing papers by "Christoph Böhringer published in 2012"

Green Jobs and Renewable Electricity Policies: Employment Impacts of Ontario's Feed-in Tariff

Abstract: Policy makers justify renewable energy promotion policies partly on the grounds that such policies have positive employment impacts. We apply a computable general equilibrium model to assess the labour market impacts of the feed-in tariff policy used by the Government of Ontario. We find that although the policy is successful at increasing the employment in the `green' sectors of the economy, the policy is also likely to increase the rate of unemployment in the province, and to reduce overall labour force participation. We conclude that policies designed to promote renewable energy should be promoted for the sake of their environmental impacts, not for their labour market effects.

Efficiency and Equity Implications of Alternative Instruments to Reduce Carbon Leakage

Abstract: The cost-effectiveness of unilateral emission abatement can be seriously hampered by emission leakage We assess three widely-discussed proposals for leakage reduction targeted at energy-intensive and trade-exposed industries: border tax adjustments, output-based allocation and industry exemptions We find that none of these measures amounts to a “magic bullet” when both efficiency and equity criteria matter Border tax adjustments reduce leakage and provide global cost savings but exacerbate regional inequality Exemptions produce very little leakage reduction and run the risk of increasing efficiency cost of climate policy Output-based allocation does no harm but also does relatively little good by our outcome measures

Optimal Emission Pricing in the Presence of International Spillovers: Decomposing Leakage and Terms-of-Trade Motives

Abstract: Carbon leakage provides an efficiency argument for unilateral climate policy to differentiate emission prices in favor of emission-intensive and trade-exposed sectors. At the same time, differential emission pricing can be (mis-)used as a beggar-thy-neighbor policy to exploit terms of trade. Using an optimal tax framework, we propose a method to decompose the leakage motive and the terms-of-trade motive for emission price differentiation. We employ our method for a quantitative impact assessment of unilateral climate policy based on empirical data. We find that the leakage motive yields only small efficiency gains compared to uniform emission pricing. Likewise, the terms-of-trade motive has rather limited potential for strategic burden shifting. We conclude that the simple first-best rule of uniform emission pricing remains a practical guideline for unilateral climate policy design.

The Value-Added of Sectoral Disaggregation: Implications on Competitive Consequences of Climate Change Policies

Abstract: Global impact assessment of unilateral climate policies is commonly based on multi‐sector, multi‐region computable general equilibrium (CGE) models that are calibrated to consistent accounts of production, consumption, and bilateral trade flows. However, global economic databases such as GTAP treat energy-intensive and trade-exposed industries rather in aggregate, thereby missing potentially important details on the heterogeneity of these sectors. In this paper, we elaborate on the availability of data resources and methodological issues in disaggregating energy‐intensive and trade-exposed sectors that receive larger attention in the public policy debate on unilateral emission regulation: non‐ferrous metals, iron and steel and non-metallic minerals. Our sensitivity analysis revolves around three types of unobserved heterogeneity at the sub-sectoral level: trade elasticities, energy consumption and technology specifications. Drawing on the example of border tax adjustments, we find that for all given technology specifications and variation in energy shares, the biggest differences emerge from variations in Armington elasticities. Even moderate changes in Armington elasticities can alter the magnitude and the sign of the effects at the sectoral level. The implications of sub‐sectoral disaggregation are not as pronounced for macroeconomic indicators and leakage as for sectoral indicators.