IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v56y2016icp625-636.html
   My bibliography  Save this article

Macroeconomic impacts of climate change mitigation in Latin America: A cross-model comparison

Author

Listed:
  • Kober, Tom
  • Summerton, Philip
  • Pollitt, Hector
  • Chewpreecha, Unnada
  • Ren, Xiaolin
  • Wills, William
  • Octaviano, Claudia
  • McFarland, James
  • Beach, Robert
  • Cai, Yongxia
  • Calderon, Silvia
  • Fisher-Vanden, Karen
  • Rodriguez, Ana Maria Loboguerrero

Abstract

In this paper we analyse macroeconomic consequences of greenhouse gas emission mitigation in Latin America up to 2050 through a multi-model comparison approach undertaken in the context of the CLIMACAP–LAMP research project. We compare two carbon tax scenarios with a business-as-usual scenario of anticipated future energy demand. In the short term, with carbon prices reaching around $15/tCO2 by 2030, most models agree that the reduction in consumer spending, as a proxy for welfare, is limited to about 0.3%. By 2050, at carbon prices of $165/tCO2, there is much more divergence in the estimated impact on consumer spending as well as GDP across models and regions, which reflects uncertainties about technology costs and substitution opportunities between technologies. We observe that the consequences of increasingly higher carbon prices, in terms of reduced consumer spending and GDP, tend to be fairly linear with the carbon price in our CGE models. However, the consequences are divergent and nonlinear in our econometric model, that is linked to an energy system model that simulates step-changes in technology substitution. The results of one model show that climate policy measures can have positive effects on consumer spending and GDP, which results from an investment stimulus and the redistribution of carbon price revenues to consumers.

Suggested Citation

  • Kober, Tom & Summerton, Philip & Pollitt, Hector & Chewpreecha, Unnada & Ren, Xiaolin & Wills, William & Octaviano, Claudia & McFarland, James & Beach, Robert & Cai, Yongxia & Calderon, Silvia & Fishe, 2016. "Macroeconomic impacts of climate change mitigation in Latin America: A cross-model comparison," Energy Economics, Elsevier, vol. 56(C), pages 625-636.
  • Handle: RePEc:eee:eneeco:v:56:y:2016:i:c:p:625-636
    DOI: 10.1016/j.eneco.2016.02.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988316300032
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.eneco.2016.02.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. van der Zwaan, Bob & Kober, Tom & Calderon, Silvia & Clarke, Leon & Daenzer, Katie & Kitous, Alban & Labriet, Maryse & Lucena, André F.P. & Octaviano, Claudia & Di Sbroiavacca, Nicolas, 2016. "Energy technology roll-out for climate change mitigation: A multi-model study for Latin America," Energy Economics, Elsevier, vol. 56(C), pages 526-542.
    2. Veysey, Jason & Octaviano, Claudia & Calvin, Katherine & Martinez, Sara Herreras & Kitous, Alban & McFarland, James & van der Zwaan, Bob, 2016. "Pathways to Mexico’s climate change mitigation targets: A multi-model analysis," Energy Economics, Elsevier, vol. 56(C), pages 587-599.
    3. Alex Bowen & Emanuele Campiglio & Massimo Tavoni, 2014. "A Macroeconomic Perspective On Climate Change Mitigation: Meeting The Financing Challenge," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-35.
    4. Sergey Paltsev & Pantelis Capros, 2013. "Cost Concepts For Climate Change Mitigation," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(supp0), pages 1-26.
    5. Calderón, Silvia & Alvarez, Andrés Camilo & Loboguerrero, Ana María & Arango, Santiago & Calvin, Katherine & Kober, Tom & Daenzer, Kathryn & Fisher-Vanden, Karen, 2016. "Achieving CO2 reductions in Colombia: Effects of carbon taxes and abatement targets," Energy Economics, Elsevier, vol. 56(C), pages 575-586.
    6. Clarke, Leon & McFarland, James & Octaviano, Claudia & van Ruijven, Bas & Beach, Robert & Daenzer, Kathryn & Herreras Martínez, Sara & Lucena, André F.P. & Kitous, Alban & Labriet, Maryse & Loboguerre, 2016. "Long-term abatement potential and current policy trajectories in Latin American countries," Energy Economics, Elsevier, vol. 56(C), pages 513-525.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joaquín Bernal-Ramírez & Jair Ojeda-Joya & Camila Agudelo-Rivera & Felipe Clavijo-Ramírez & Carolina Durana-Ángel & Clark Granger-Castaño & Daniel Osorio-Rodríguez & Daniel Parra-Amado & José Pulido &, 2022. "Impacto macroeconómico del cambio climático en Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, issue 102, pages 1-62, July.
    2. Lombardi, Francesco & Rocco, Matteo Vincenzo & Colombo, Emanuela, 2019. "A multi-layer energy modelling methodology to assess the impact of heat-electricity integration strategies: The case of the residential cooking sector in Italy," Energy, Elsevier, vol. 170(C), pages 1249-1260.
    3. Octaviano, Claudia & Paltsev, Sergey & Gurgel, Angelo Costa, 2016. "Climate change policy in Brazil and Mexico: Results from the MIT EPPA model," Energy Economics, Elsevier, vol. 56(C), pages 600-614.
    4. Diniz Oliveira, Thais & Costa Gurgel, Angelo & Tonry, Steve, 2021. "Potential trading partners of a brazilian emissions trading scheme: The effects of linking with a developed region (Europe) and two developing regions (Latin America and China)," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    5. Diniz Oliveira, Thais & Gurgel, Angelo & Tonry, Steve, 2018. "The Effects for Brazil of Linking Emissions Trading Schemes in the context of the Heterogeneity of Trading Partners," Conference papers 332951, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. N. B. Melnikov & A. P. Gruzdev & M. G. Dalton & M. Weitzel & B. C. O’Neill, 2021. "Parallel Extended Path Method for Solving Perfect Foresight Models," Computational Economics, Springer;Society for Computational Economics, vol. 58(2), pages 517-534, August.
    7. Melnikov, Nikolai B. & O’Neill, Brian C. & Dalton, Michael G. & van Ruijven, Bas J., 2017. "Downscaling heterogeneous household outcomes in dynamic CGE models for energy-economic analysis," Energy Economics, Elsevier, vol. 65(C), pages 87-97.
    8. Cai, Yongxia & Woollacott, Jared & Beach, Robert H. & Rafelski, Lauren E. & Ramig, Christopher & Shelby, Michael, 2023. "Insights from adding transportation sector detail into an economy-wide model: The case of the ADAGE CGE model," Energy Economics, Elsevier, vol. 123(C).
    9. Dimitar Zlatinov & Bozhidar Nedev & Ilia Atanasov & Nedko Kosev, 2019. "Effects on the Economic Growth in Bulgaria during the Transition to Low-Carbon Economy in the Energy Sector," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 110-127.
    10. Wen, Jun & Zhang, Sen & Chang, Chun-Ping & Anugrah, Donni Fajar & Affandi, Yoga, 2023. "Does climate vulnerability promote green investment under energy supply restriction?," Energy Economics, Elsevier, vol. 124(C).
    11. Song, Malin & Zhu, Shuai & Wang, Jianlin & Zhao, Jiajia, 2020. "Share green growth: Regional evaluation of green output performance in China," International Journal of Production Economics, Elsevier, vol. 219(C), pages 152-163.
    12. Cai, Yongxia & Woollacott, Jared & Beach, Robert & Rafelski, Lauren & Ramig, Christopher & Shelby, Michael, 2022. "Insights from Adding Transportation Sector Detail into an Economy-Wide Model: The Case of the ADAGE CGE Model," Conference papers 333451, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. Leonidas Paroussos & Kostas Fragkiadakis & Panagiotis Fragkos, 2020. "Macro-economic analysis of green growth policies: the role of finance and technical progress in Italian green growth," Climatic Change, Springer, vol. 160(4), pages 591-608, June.
    14. Bachner, G. & Mayer, J. & Steininger, K.W. & Anger-Kraavi, A. & Smith, A. & Barker, T.S., 2020. "Uncertainties in macroeconomic assessments of low-carbon transition pathways - The case of the European iron and steel industry," Ecological Economics, Elsevier, vol. 172(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arango-Aramburo, Santiago & Turner, Sean W.D. & Daenzer, Kathryn & Ríos-Ocampo, Juan Pablo & Hejazi, Mohamad I. & Kober, Tom & Álvarez-Espinosa, Andrés C. & Romero-Otalora, Germán D. & van der Zwaan, , 2019. "Climate impacts on hydropower in Colombia: A multi-model assessment of power sector adaptation pathways," Energy Policy, Elsevier, vol. 128(C), pages 179-188.
    2. van der Zwaan, Bob & Kober, Tom & Calderon, Silvia & Clarke, Leon & Daenzer, Katie & Kitous, Alban & Labriet, Maryse & Lucena, André F.P. & Octaviano, Claudia & Di Sbroiavacca, Nicolas, 2016. "Energy technology roll-out for climate change mitigation: A multi-model study for Latin America," Energy Economics, Elsevier, vol. 56(C), pages 526-542.
    3. Diniz Oliveira, Thais & Gurgel, Angelo & Tonry, Steve, 2018. "The Effects for Brazil of Linking Emissions Trading Schemes in the context of the Heterogeneity of Trading Partners," Conference papers 332951, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. van Ruijven, Bas J. & Daenzer, Katie & Fisher-Vanden, Karen & Kober, Tom & Paltsev, Sergey & Beach, Robert H. & Calderon, Silvia Liliana & Calvin, Kate & Labriet, Maryse & Kitous, Alban & Lucena, Andr, 2016. "Baseline projections for Latin America: base-year assumptions, key drivers and greenhouse emissions," Energy Economics, Elsevier, vol. 56(C), pages 499-512.
    5. Diniz Oliveira, Thais & Costa Gurgel, Angelo & Tonry, Steve, 2021. "Potential trading partners of a brazilian emissions trading scheme: The effects of linking with a developed region (Europe) and two developing regions (Latin America and China)," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    6. Lucena, André F.P. & Clarke, Leon & Schaeffer, Roberto & Szklo, Alexandre & Rochedo, Pedro R.R. & Nogueira, Larissa P.P. & Daenzer, Kathryn & Gurgel, Angelo & Kitous, Alban & Kober, Tom, 2016. "Climate policy scenarios in Brazil: A multi-model comparison for energy," Energy Economics, Elsevier, vol. 56(C), pages 564-574.
    7. Oskar LECUYER & Esperanza GONZALEZ-MAHECHA & Michelle HALLACK & Morgan BAZILIAN & Adrien VOGT-SCHILB, 2019. "Committed emissions and the risk of stranded assets from power plants in Latin America and the Caribbean," Working Paper 7d9ac525-0354-46ef-aa0b-f, Agence française de développement.
    8. Octaviano, Claudia & Paltsev, Sergey & Gurgel, Angelo Costa, 2016. "Climate change policy in Brazil and Mexico: Results from the MIT EPPA model," Energy Economics, Elsevier, vol. 56(C), pages 600-614.
    9. Marlen Fonseca Vigoya & Jos Garc a Mendoza & Sofia Orjuela Abril, 2020. "Analysis of the Level of Implementation of Programs for the Efficient Use of Energy and Unconventional Sources: Case Study Colombia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 679-686.
    10. van der Zwaan, Bob & Kober, Tom & Longa, Francesco Dalla & van der Laan, Anouk & Jan Kramer, Gert, 2018. "An integrated assessment of pathways for low-carbon development in Africa," Energy Policy, Elsevier, vol. 117(C), pages 387-395.
    11. Kober, Tom & Falzon, James & van der Zwaan, Bob & Calvin, Katherine & Kanudia, Amit & Kitous, Alban & Labriet, Maryse, 2016. "A multi-model study of energy supply investments in Latin America under climate control policy," Energy Economics, Elsevier, vol. 56(C), pages 543-551.
    12. Rezai, Armon & Stagl, Sigrid, 2016. "Ecological Macreconomics: Introduction and Review," Ecological Economic Papers 9, WU Vienna University of Economics and Business.
    13. Boglioni, Michele & Zambelli, Stefano, 2018. "Specialization patterns and reduction of CO2 emissions. An empirical investigation of environmental preservation and economic efficiency," Energy Economics, Elsevier, vol. 75(C), pages 134-149.
    14. Mardones, Cristian & Baeza, Nicolas, 2018. "Economic and environmental effects of a CO2 tax in Latin American countries," Energy Policy, Elsevier, vol. 114(C), pages 262-273.
    15. Campiglio, Emanuele, 2016. "Beyond carbon pricing: The role of banking and monetary policy in financing the transition to a low-carbon economy," Ecological Economics, Elsevier, vol. 121(C), pages 220-230.
    16. Heleen van Soest & Lara Aleluia Reis & Detlef van Vuuren & Christoph Bertram & Laurent Drouet & Jessica Jewell & Elmar Kriegler & Gunnar Luderer & Keywan Riahi & Joeri Rogelj & Massimo Tavoni & Michel, 2015. "Regional Low-Emission Pathways from Global Models," Working Papers 2015.110, Fondazione Eni Enrico Mattei.
    17. Mardones, Cristian & Flores, Belén, 2018. "Effectiveness of a CO2 tax on industrial emissions," Energy Economics, Elsevier, vol. 71(C), pages 370-382.
    18. John Bistline & Geoffrey Blanford & Maxwell Brown & Dallas Burtraw & Maya Domeshek & Jamil Farbes & Allen Fawcett & Anne Hamilton & Jesse Jenkins & Ryan Jones & Ben King & Hannah Kolus & John Larsen &, 2023. "Emissions and Energy Impacts of the Inflation Reduction Act," Papers 2307.01443, arXiv.org.
    19. Mulder, Machiel & Zeng, Yuyu, 2018. "Exploring interaction effects of climate policies: A model analysis of the power market," Resource and Energy Economics, Elsevier, vol. 54(C), pages 165-185.
    20. Di Sbroiavacca, Nicolás & Nadal, Gustavo & Lallana, Francisco & Falzon, James & Calvin, Katherine, 2016. "Emissions reduction scenarios in the Argentinean Energy Sector," Energy Economics, Elsevier, vol. 56(C), pages 552-563.

    More about this item

    Keywords

    Climate policy; Energy and economy models; GDP; Employment;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:56:y:2016:i:c:p:625-636. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.