Policy Evaluation with Computable General Equilibrium Models by Fossati Amedeo Wiegard Wolfgang

Author:Fossati, Amedeo,Wiegard, Wolfgang.
Language: eng
Format: epub
Publisher: Taylor & Francis (CAM)

A tax of 30 ECU in Germany produces a slight increase in carbon emissions outside the EU, as production of energy-intensive industries shifts to the rest of the EU and to the ROW (presumably Central and Eastern Europe).

Column C shows the effect of a 30 ECU tax in the EU excluding Germany and the UK. Because this is a heterogeneous country grouping, and oil or nuclear fuel inputs in one may not easily substitute for coal in another, the fuel substitution elasticities for the ‘other EU’ countries have been reduced by 3/8 compared to the UK and Germany. The overall effect is for the 30 ECU/tC tax to reduce carbon emissions by 20 per cent: less than with a similar tax in Germany, but more than in the UK. The terms of trade effect, however, is greater (a rise of nearly 0.9 per cent), and this contributes to a rise in real wages, real GNP and welfare. The tax export effect means that incomes in the UK, Germany and the Rest of the World are reduced somewhat.

Column D shows the effects of a tax across the EU. The effect of the tax on emissions is marginally greater than when the countries introduce the tax individually. The tax still has more effect proportionally in Germany, and less in the UK, than in the rest of the EU. Since European countries trade with one another, the terms of trade gain to the countries introducing the tax is less than when they do so individually. Consequently, GNP in the UK and Germany falls slightly instead of rising, though that in the rest of the EU still rises a little. Real GDP in the ROW is reduced by 0.04 per cent.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.