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A CGE-Analysis of Energy Policies Considering Labor Market Imperfections and Technology Specifications

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  • Kuster, Robert
  • Ellersdorfer, Ingo
  • Fahl, Ulrich

Abstract

The paper establishes a CGE/MPSGE model for evaluating energy policy measures with emphasis on their employment impacts. It specifies a dual labor market with respect to qualification, two different mechanisms for skill specific unemployment, and a technology detailed description of electricity generation. Non clearing of the dual labor market is modeled via minimum wage constraints and via wage curves. The model is exemplarily applied for the analysis of capital subsidies on the application of technologies using renewable energy sources. Quantitative results highlight that subsidies on these technologies do not automatically lead to a significant reduction in emissions. Moreover, if emission reductions are achieved these might actually partly result from negative growth effects induced by the promotion of cost inefficient technologies. Inefficiencies in the energy system increase unemployment for both skilled and unskilled labor.

Suggested Citation

  • Kuster, Robert & Ellersdorfer, Ingo & Fahl, Ulrich, 2007. "A CGE-Analysis of Energy Policies Considering Labor Market Imperfections and Technology Specifications," Climate Change Modelling and Policy Working Papers 12035, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcc:12035
    DOI: 10.22004/ag.econ.12035
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    Cited by:

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    5. Mu, Yaqian & Cai, Wenjia & Evans, Samuel & Wang, Can & Roland-Holst, David, 2018. "Employment impacts of renewable energy policies in China: A decomposition analysis based on a CGE modeling framework," Applied Energy, Elsevier, vol. 210(C), pages 256-267.
    6. Shiro Takeda & Toshi H. Arimura & Makoto Sugino, 2019. "Labor Market Distortions and Welfare-Decreasing International Emissions Trading," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 271-293, September.
    7. Mu, Yaqian & Wang, Can & Cai, Wenjia, 2018. "The economic impact of China's INDC: Distinguishing the roles of the renewable energy quota and the carbon market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2955-2966.
    8. Erisa Dautaj Şenerdem & K. Ali Akkemik, 2020. "Evaluation of the reform in the Turkish electricity sector: a CGE analysis," International Journal of Economic Policy Studies, Springer, vol. 14(2), pages 389-419, August.
    9. Rivers, Nicholas, 2013. "Renewable energy and unemployment: A general equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 35(4), pages 467-485.
    10. Mordechai SHECHTER & Ruslana Rachel PALATNIK, 2008. "Can Climate Change Mitigation Policy Benefit the Israeli Economy? A Computable General Equilibrium Analysis," EcoMod2008 23800132, EcoMod.
    11. Mu, Yaqian & Evans, Samuel & Wang, Can & Cai, Wenjia, 2018. "How will sectoral coverage affect the efficiency of an emissions trading system? A CGE-based case study of China," Applied Energy, Elsevier, vol. 227(C), pages 403-414.
    12. Muritala Taiwo Adewale & Awolaja Ayodeji Muyideen & James Olurotimi, 2013. "Impact of Climate Change on Employment in Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 9(3), pages 153-161, June.
    13. Kenneth A. Castellanos & Garth Heutel, 2019. "Unemployment, Labor Mobility, and Climate Policy," NBER Working Papers 25797, National Bureau of Economic Research, Inc.
    14. Manzoor, Davood & Haqiqi, Iman & Aghababaei, Mohammad, 2012. "Decomposing Electricity Demand Elasticity in Iran: Computable General Equilibrium Approach," MPRA Paper 95817, University Library of Munich, Germany.
    15. Robert Beestermöller & Ulrich Fahl, 2013. "Impacts of German energy policies on the competitiveness of national energy intensive industries," EcoMod2013 5653, EcoMod.
    16. Davood, Manzoor & Asghar, Shahmoradi & Iman, Haqiqi, 2010. "An Assessment of the Impact of Reducing Implicit and Explicit Energy Subsidies in Iran; Using a Computable General Equilibrium Model Based on a Modified Micro Consistent Matrix," MPRA Paper 95808, University Library of Munich, Germany.
    17. Trink, Thomas & Schmid, Christoph & Schinko, Thomas & Steininger, Karl W. & Loibnegger, Thomas & Kettner, Claudia & Pack, Alexandra & Töglhofer, Christoph, 2010. "Regional economic impacts of biomass based energy service use: A comparison across crops and technologies for East Styria, Austria," Energy Policy, Elsevier, vol. 38(10), pages 5912-5926, October.
    18. Witajewski-Baltvilks Jan & Boratyński Jakub, 2021. "Workers or Consumers: Who Pays for Low-Carbon Transition – Theoretical Analysis of Welfare Change in General Equilibrium Setting," Central European Economic Journal, Sciendo, vol. 8(55), pages 231-245, January.
    19. Manzoor, Davood & Haqiqi, Iman & Aghababaei, Mohammad, 2012. "Modeling Dutch Disease in the Economy of Iran: A Computable General Equilibrium Approach," MPRA Paper 95821, University Library of Munich, Germany.

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