The value-added of sectoral disaggregation: Implications on competitive consequences of climate change policies
AbstractGlobal impact assessment of unilateral climate policies is commonly based on multi-sector, multi-region computable general equilibrium (CGE) models that are calibrated to consistent accounts of production, consumption, and bilateral trade flows. However, global economic databases such as GTAP treat energy-intensive and trade-exposed industries rather in aggregate, thereby missing potentially important details on the heterogeneity of these sectors. In this paper, we elaborate on the availability of data resources and methodological issues in disaggregating energy-intensive and tradeexposed sectors that receive larger attention in the public policy debate on unilateral emission regulation: non-ferrous metals, iron and steel and non-metallic minerals. Our sensitivity analysis revolves around three types of unobserved heterogeneity at the sub-sectoral level: trade elasticities, energy consumption and technology specifications. Drawing on the example of border tax adjustments, we find that for all given technology specifications and variation in energy shares, the biggest differences emerge from variations in Armington elasticities. Even moderate changes in Armington elasticities can alter the magnitude and the sign of the effects at the sectoral level. The implications of sub-sectoral disaggregation are not as pronounced for macroeconomic indicators and leakage as for sectoral indicators. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 12-069.
Date of creation: 2012
Date of revision:
sectoral disaggregation; emissions trading; border adjustment; competitiveness; carbon leakage;
Other versions of this item:
- Alexeeva-Talebi, Victoria & Böhringer, Christoph & Löschel, Andreas & Voigt, Sebastian, 2012. "The value-added of sectoral disaggregation: Implications on competitive consequences of climate change policies," Energy Economics, Elsevier, vol. 34(S2), pages S127-S142.
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-06 (All new papers)
- NEP-ENE-2012-12-06 (Energy Economics)
- NEP-ENV-2012-12-06 (Environmental Economics)
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.:
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"Where Are the Industrial Technologies in Energy-Economy Models?: An Innovative CGE Approach for Steel Production in Germany,"
Discussion Papers of DIW Berlin
605, DIW Berlin, German Institute for Economic Research.
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- Koesler, Simon, 2013. "Catching the rebound: Economy-wide implications of an efficiency shock in the provision of transport services by households," ZEW Discussion Papers 13-082, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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