Kiel Working Papers, Kiel Institute for World Economics
No 1464:
The competitiveness effects of the EU climate policy
Sonja Peterson and Gernot Klepper
Abstract: To show global leadership and to foster the international
negotiations for a long term international climate regime the EU has
decided to reduce its GHG emissions by 20% relative to 1990 until the year
2020. These reductions will even rise to 30% “if there is an international
agreement committing other developed countries to comparable emission
reductions and economically more advanced developing countries to
contributing adequately according to their responsibilities and respective
capabilities”. At the same time, the European council started in 2000 the
so-called Lisbon process which established the issue of competitiveness as
a priority area for EU policy and there is some concern about the
competitiveness effects of EU climate policy. We use the multi-sector,
multi-region computable general equilibrium model DART to assess the
impacts of the recent EU climate policy proposals for the competitiveness
of the European economies and specific sectors. There are three general
insights. First, the effects of EU climate policies on competitiveness are
relatively small if one leaves out the fossil fuels themselves the
consumption of which is supposed to be reduced anyway. The losses of the
energy intensive industries are compensated by gains in other manufacturing
sectors. Secondly, there is no uniform effect across the member states of
the EU. It is the special circumstances in side the different sectors
within the member states that determine whether a sector wins or looses
competitiveness. And finally, the changes in competitiveness are strongly
influenced by the choice of the particular policy design. A more efficient
instrument choice not only reduces the competitiveness effects it also
distributes the burden more equally
Keywords: Post Kyoto, EU, emission trading, competitiveness; (follow links to similar papers)
JEL-Codes: D58,; Q48,; Q54; (follow links to similar papers)
35 pages, November 2008
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Downloadable files:
KAP-1464.pdf 
Download Statistics
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design Joakim Ekebom
