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Economic Dynamic Modelling of Climate Policy in Poland

Author

Listed:
  • Kiuila Olga
  • Lewczuk Emilia

    (University of Warsaw, Poland)

Abstract

Poland is responsible for 9% of CO2 emission in the European Union (EU), making it the fifth biggest emitter in the region. The energy sector is dominated by electricity produced from coal (around 70%). The country currently uses massive subsidies to boost the coal sector. We propose a dynamic intertemporal hybrid general equilibrium model to simulate the economic effects of sector regulations and new policy targets within environmental taxation scenarios, by accounting for a complex set of linkages between the energy sector and other components of the economy. Our simulation results suggest that positive economic growth is possible with a realistic energy mix, but it will not offer considerable emission reduction, as required by the European Commission. In the short-time horizon, the best choice is renewable energy sources indicated by less capital-intensive technologies (such as biomass). In the long-time horizon, more capital-intensive technologies (such as wind turbines) will be a better choice for economic growth. Carbon tax plays a crucial role in optimal energy mix targets, since its elimination ceteris paribus implies negative economic growth.

Suggested Citation

  • Kiuila Olga & Lewczuk Emilia, 2021. "Economic Dynamic Modelling of Climate Policy in Poland," Central European Economic Journal, Sciendo, vol. 8(55), pages 246-255, January.
    • Handle: RePEc:vrs:ceuecj:v:8:y:2021:i:55:p:246-255:n:8
    DOI: 10.2478/ceej-2021-0018
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    References listed on IDEAS

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    1. Kiuila, O. & Rutherford, T.F., 2013. "The cost of reducing CO2 emissions: Integrating abatement technologies into economic modeling," Ecological Economics, Elsevier, vol. 87(C), pages 62-71.
    2. Aaditya Mattoo & Arvind Subramanian & Dominique van der Mensbrugghe & Jianwu He, 2009. "Reconciling Climate Change and Trade Policy," Working Paper Series WP09-15, Peterson Institute for International Economics.
    3. Bhattacharyya, Subhes C., 1996. "Applied general equilibrium models for energy studies: a survey," Energy Economics, Elsevier, vol. 18(3), pages 145-164, July.
    4. World Bank, 2011. "Transition to a Low-Emissions Economy in Poland," World Bank Publications - Reports 27419, The World Bank Group.
    5. Bohringer, Christoph & Rutherford, Thomas F., 2008. "Combining bottom-up and top-down," Energy Economics, Elsevier, vol. 30(2), pages 574-596, March.
    6. Kiuila, Olga, 2018. "Decarbonisation perspectives for the Polish economy," Energy Policy, Elsevier, vol. 118(C), pages 69-76.
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    Cited by:

    1. Czajkowski Mikołaj, 2021. "Editorial: Special Edition of the Central European Economic Journal to Mark the 70th Birthday of Prof. Tomasz Żylicz," Central European Economic Journal, Sciendo, vol. 8(55), pages 176-179, January.

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    More about this item

    Keywords

    computable general equilibrium modelling; decarbonization; energy technologies;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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