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A model-based assessment of first-mover advantage and climate policy

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  • Hector Pollitt
  • Philip Summerton
  • Ger Klaassen

Abstract

This paper provides a model-based macroeconomic assessment of First-Mover Advantage (FMA) in environmental technologies, in which a European sector becomes world leader and captures the global market for a particular technology. The E3MG model is used to assess a set of scenarios where the FMA is established in a range of renewable technologies. Although to some extent dependent on scenario assumptions, the model results show that FMA could provide a small but noticeable boost to European GDP (of some 0.5 %) and employment, which could go some way to countering possible losses in production from implementing ambitious climate policy. The impacts are found to be temporary in nature, but some of the sectors that benefit the most are also those that could be expected to lose out from higher energy prices. Copyright Springer 2015

Suggested Citation

  • Hector Pollitt & Philip Summerton & Ger Klaassen, 2015. "A model-based assessment of first-mover advantage and climate policy," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(2), pages 299-312, April.
    • Handle: RePEc:spr:envpol:v:17:y:2015:i:2:p:299-312
    DOI: 10.1007/s10018-014-0098-6
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    References listed on IDEAS

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    1. Tol, Richard S.J., 2009. "Intra- and extra-union flexibility in meeting the European Union's emission reduction targets," Energy Policy, Elsevier, vol. 37(11), pages 4329-4336, November.
    2. J. Delbeke & G. Klaassen & T. van Ierland & P. Zapfel, 2010. "The Role of Environmental Economics in Recent Policy Making at the European Commission," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(1), pages 24-43, Winter.
    3. G. Klaassen & J. Nill & T. Van Ierland & B. Saveyn & S. Vergote, 2012. "Costs and Benefits of Reducing the EU’s Greenhouse Gas Emissions by 30% in 2020," Review of Business and Economic Literature, Intersentia, vol. 57(2), pages 157-179, June.
    4. Patrik Söderholm & Ger Klaassen, 2007. "Wind Power in Europe: A Simultaneous Innovation–Diffusion Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(2), pages 163-190, February.
    5. Jaffe, Adam B. & Newell, Richard G. & Stavins, Robert N., 2005. "A tale of two market failures: Technology and environmental policy," Ecological Economics, Elsevier, vol. 54(2-3), pages 164-174, August.
    6. G. Klaassen & J. Nill & T. Van Ierland & B. Saveyn & S. Vergote, 2012. "Costs and Benefits of Reducing the EU’s Greenhouse Gas Emissions by 30% in 2020," Review of Business and Economic Literature, Intersentia, vol. 57(2), pages 157-179, June.
    7. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    8. Terry Barker and S. Serban Scrieciu, 2010. "Modeling Low Climate Stabilization with E3MG: Towards a 'New Economics' Approach to Simulating Energy-Environment-Economy System Dynamics," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
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    Cited by:

    1. Paul Lehmann & Jos Sijm & Erik Gawel & Sebastian Strunz & Unnada Chewpreecha & Jean-Francois Mercure & Hector Pollitt, 2019. "Addressing multiple externalities from electricity generation: a case for EU renewable energy policy beyond 2020?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 21(2), pages 255-283, April.

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    More about this item

    Keywords

    Employment; Innovation; Economic growth; Climate policy; EU; Q43; Q52; Q58;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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