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Estimating carbon leakage and the efficiency of border adjustments in general equilibrium — Does sectoral aggregation matter?

  • Caron, Justin

Estimates of the carbon leakage resulting from sub-global climate policies tend to be lower when using economy-wide general equilibrium models than what technology-specific and bottom-up models suggest. In order to test whether this difference is due to excessive sectoral aggregation, I exploit disaggregated data and estimate unobserved values to create a dataset with rich industrial sector detail. The bias caused by sectoral aggregation is estimated by calibrating a computable general equilibrium model to this dataset and comparing results with those generated from more aggregated data.

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Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 34 (2012)
Issue (Month): S2 ()
Pages: S111-S126

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Handle: RePEc:eee:eneeco:v:34:y:2012:i:s2:p:s111-s126
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