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Sharing the burden for climate change mitigation in the Canadian federation

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Author Info

  • Christoph Böhringer

    ()
    (Carl von Ossietzky Universität Oldenburg, Institut für Volkswirtschaftslehre & ZenTra)

  • Nicholas Rivers

    ()
    (Graduate School of Public and International Affairs and Institute of the Environment, University of Ottawa)

  • Thomas F. Rutherford

    ()
    (University of Wisconsin, Madison)

  • Randall Wigle

    ()
    (School of Business and Economics, Wifrid Laurier University)

Abstract

Dividing the burden for greenhouse gas abatement amongst the provinces has proven chal- lenging in Canada, and is a major factor contributing to Canada’s poor historic performance on greenhouse gas abatement. As the country aims to achieve substantial cuts to emissions over the next decade and by mid-century, such burden sharing considerations are likely to be elevated in importance. This paper uses a detailed Canadian computable general equilibrium model to compare a number of archetypal rules for sharing the burden of a joint commitment amongst members for the case of greenhouse gas reductions in Canada. Because of the substantial het- erogeneity amongst Canadian provinces, these different burden sharing rules imply significantly different relative abatement effort amongst provinces, and also significantly different welfare implications. We compare these archetypal burden sharing rules to existing provincial emission reduction commitments, and find that none of the standard burden sharing rules comes close to existing commitments. We argue that future efforts to share the burden of greenhouse gas abatement in Canada would be more successful if they were informed by a formal analysis such as the one presented here.

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File URL: http://ssrn.com/abstract=2386508
File Function: First version, Apr 23, 2013
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Bibliographic Info

Paper provided by ZenTra - Center for Transnational Studies in its series ZenTra Working Papers in Transnational Studies with number 30 / 2014.

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Length: 47 pages
Date of creation: Apr 2013
Date of revision: Jan 2014
Handle: RePEc:zen:wpaper:30

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Keywords: climate change; burden sharing; policy; computable general equilibrium model;

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References

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  1. Kverndokk, Snorre & Rose , Adam, 2008. "Equity and Justice in Global Warming Policy," Memorandum 21/2008, Oslo University, Department of Economics.
  2. Christoph Böhringer & Carolyn Fischer & Knut Einar Rosendahl, 2010. "The Global Effects of Subglobal Climate Policies," Discussion Papers 634, Research Department of Statistics Norway.
  3. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  4. Christoph Bohringer & Heinz Welsch, 2006. "Burden sharing in a greenhouse: egalitarianism and sovereignty reconciled," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 981-996.
  5. Jotham Peters & Chris Bataille & Nic Rivers & Mark Jaccard, 2010. "Taxing Emissions, Not Income: How to Moderate the Regional Impact of Federal Environment Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 314, November.
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  7. Adam Rose & Zhong Zhang, 2004. "Interregional burden-sharing of greenhouse gas mitigation in the United States," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 9(4), pages 477-500, October.
  8. Yazid Dissou & Lilia Karnizova & Qian Sun, 2012. "Industry-level Econometric Estimates of Energy-capital-labour Substitution with a Nested CES Production Function," Working Papers 1214E, University of Ottawa, Department of Economics.
  9. Kathryn Harrison, 2007. "The Road not Taken: Climate Change Policy in Canada and the United States," Global Environmental Politics, MIT Press, vol. 7(4), pages 92-117, November.
  10. Miketa, Asami & Schrattenholzer, Leo, 2006. "Equity implications of two burden-sharing rules for stabilizing greenhouse-gas concentrations," Energy Policy, Elsevier, vol. 34(7), pages 877-891, May.
  11. Böhringer, Christoph & Helm, Carsten, 2008. "On the fair division of greenhouse gas abatement cost," Resource and Energy Economics, Elsevier, vol. 30(2), pages 260-276, May.
  12. Florentine Schwark, 2010. "Economics of Endogenous Technical Change in CGE Models - The Role of Gains from Specialization," CER-ETH Economics working paper series 10/130, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  13. Azusa OKAGAWA & Kanemi BAN, 2008. "Estimation of substitution elasticities for CGE models," Discussion Papers in Economics and Business 08-16, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  14. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, December.
  15. Ringius, Lasse & Torvanger, Asbjorn & Holtsmark, Bjart, 1998. "Can multi-criteria rules fairly distribute climate burdens?: OECD results from three burden sharing rules," Energy Policy, Elsevier, vol. 26(10), pages 777-793, August.
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