Carbon Taxes and Joint Implementation. An Applied General Equilibrium Analysis for Germany and India
AbstractGermany has committed itself toreducing its carbon emissions by 25 percent in2005 as compared to 1990 emission levels. Toachieve this goal, the government has recentlylaunched an environmental tax reform whichentails a continuous increase in energy taxesin conjunction with a revenue-neutral cut innon-wage labor costs. This policy is supposedto yield a double dividend, reducing both, theproblem of global warming and high unemploymentrates. In addition to domestic actions,international treaties on climate protectionallow for the supplementary use of flexibleinstruments to exploit cheaper emissionreduction possibilities elsewhere. One concreteoption for Germany would be to enter jointimplementation (JI) with developing countriessuch as India where Germany pays emissionreduction abroad rather than meeting itsreduction target solely by domestic action. Inthis paper, we investigate whether anenvironmental tax reform cum JI providesemployment and overall efficiency gains ascompared to an environmental tax reformstand-alone. We address this question in theframework of a large-scale general equilibriummodel for Germany and India where Germany mayundertake JI with the Indian electricitysector. Our main finding is that JI offsetslargely the adverse effects of carbon emissionconstraints on the German economy. JIsignificantly lowers the level of carbon taxesand thus reduces the total costs of abatementas well as negative effects on labor demand. Inaddition, JI triggers direct investment demandfor energy efficient power plants produced inGermany. This provides positive employmenteffects and additional income for Germany. ForIndia, joint implementation equips itselectricity industry with scarce capital goodsleading to a more efficient power productionwith lower electricity prices for the economyand substantial welfare gains. Copyright Kluwer Academic Publishers 2003
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.
Volume (Year): 24 (2003)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100263
computable general equilibrium modeling; energy efficiency improvement; environmental tax reform; joint implementation; productivity gaps;
Other versions of this item:
- Böhringer, Christoph & Conrad, Klaus & Löschel, Andreas, 2000. "Carbon Taxes and Joint Implementation An applied general equilibrium analysis for Germany and India," Discussion Papers 591, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- F20 - International Economics - - International Factor Movements and International Business - - - General
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Heinz Welsch, 1996. "Recycling of carbon/energy taxes and the labor market," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 8(2), pages 141-155, September.
- Christoph Böhringer & Thomas Rutherford, 2002. "Carbon Abatement and International Spillovers," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(3), pages 391-417, July.
- Stefan Bach, 1997. "Steuerreform in Deutschland," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 66(3-4), pages 291-316.
- Lawrence Goulder, 1995. "Environmental taxation and the double dividend: A reader's guide," International Tax and Public Finance, Springer, vol. 2(2), pages 157-183, August.
- Bose, Ranjan Kumar & Shukla, Megha, 1999. "Elasticities of electricity demand in India," Energy Policy, Elsevier, vol. 27(3), pages 137-146, March.
- Berndt, Ernst R. & Fuss, Melvyn A., 1986. "Productivity measurement with adjustments for variations in capacity utilization and other forms of temporary equilibrium," Journal of Econometrics, Elsevier, vol. 33(1-2), pages 7-29.
- Jackson, Tim, 1995. "Joint implementation and cost-effectiveness under the Framework Convention on Climate Change," Energy Policy, Elsevier, vol. 23(2), pages 117-138, February.
- Jean-Marc Burniaux & John P. Martin & Giuseppe Nicoletti & Joaquim Oliveira Martins, 1992. "GREEN a Multi-Sector, Multi-Region General Equilibrium Model for Quantifying the Costs of Curbing CO2 Emissions: A Technical Manual," OECD Economics Department Working Papers 116, OECD Publishing.
- John Hutton & Anna Ruocco, 1999. "Tax Reform and Employment in Europe," International Tax and Public Finance, Springer, vol. 6(3), pages 263-287, August.
- Auffhammer, Maximilian & Carson, Richard Taylor, 2004.
"Forecasting the path of China's CO2 emissions using province level information,"
CUDARE Working Paper Series
0971, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy, revised 2007.
- Auffhammer, Maximilian & Carson, Richard T., 2008. "Forecasting the path of China's CO2 emissions using province-level information," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 229-247, May.
- Auffhammer, Maximilian & Carson, Richard T., 2007. "Forecasting the Path of China's CO2 Emissions Using Province Level Information," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt6d28j8rg, Department of Agricultural & Resource Economics, UC Berkeley.
- Arief Anshory Yusuf, 2004. "Poverty and Environmental Degradation: Searching for Theoretical Linkages," Working Papers in Economics and Development Studies (WoPEDS) 200403, Department of Economics, Padjadjaran University, revised Oct 2004.
- Böhringer, Christoph, 2003. "The Kyoto Protocol: A Review and Perspectives," ZEW Discussion Papers 03-61, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Larson, Donald F. & Ambrosi, Philippe & Dinar, Ariel & Rahman, Shaikh Mahfuzur & Entler, Rebecca, 2008. "Carbon markets, institutions, policies, and research," Policy Research Working Paper Series 4761, The World Bank.
- Brechet, Thierry & Lussis, Benoit, 2006. "The contribution of the clean development mechanism to national climate policies," Journal of Policy Modeling, Elsevier, vol. 28(9), pages 981-994, December.
- Olga Kiuila, 2011. "Interactions between trade and environmental policies in the Czech economy," Working Papers 2011-16, Faculty of Economic Sciences, University of Warsaw.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.