Air Pollution Policy in Europe: Quantifying the Interaction with Greenhouse Gases and Climate Change Policies
AbstractThis paper (CPB/PBL) uses the computable general equilibrium model WorldScan to analyse interactions between EUâ€™s air pollution and climate change policies. Covering the entire world and seven EU countries, WorldScan simulates economic growth in a neo-classical recursive dynamic framework, including emissions and abatement of greenhouse gases (CO 2, N2O and CH4) and air pollutants (SO2, NOx, NH3 and PM2.5). Abatement includes the possibility of using end-of-pipe control options that remove pollutants without affecting the emissionproducing activity itself. This paper analyses several variants of EUâ€™s air pollution policies for the year 2020. Air pollution policy will depend on end-of-pipe controls for not more than 50%, thus also at least 50% of the required emission reduction will come from changes in the use of energy through efficiency improvements, fuel switching and other structural changes in the economy. Greenhouse gas emissions thereby decrease, which renders climate change policies less costly. Our results show that carbon prices will fall, but not more than 33%, although they could drop to zero when the EU agrees on a more stringent air pollution policy.
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Bibliographic InfoPaper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 220.
Date of creation: Oct 2012
Date of revision:
Find related papers by JEL classification:
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-13 (All new papers)
- NEP-ENE-2012-10-13 (Energy Economics)
- NEP-ENV-2012-10-13 (Environmental Economics)
- NEP-RES-2012-10-13 (Resource Economics)
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