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Achieving CO2 reductions in Colombia: Effects of carbon taxes and abatement targets

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Listed:
  • Calderón, Silvia
  • Alvarez, Andrés Camilo
  • Loboguerrero, Ana María
  • Arango, Santiago
  • Calvin, Katherine
  • Kober, Tom
  • Daenzer, Kathryn
  • Fisher-Vanden, Karen

Abstract

In this paper we investigate CO2 emission scenarios for Colombia and the effects of implementing carbon taxes and abatement targets on the energy system. By comparing baseline and policy scenario results from two integrated assessment partial equilibrium models TIAM-ECN and GCAM and two general equilibrium models Phoenix and MEG4C, we provide an indication of future developments and dynamics in the Colombian energy system. Currently, the carbon intensity of the energy system in Colombia is low compared to other countries in Latin America. However, this trend may change given the projected rapid growth of the economy and the potential increase in the use of carbon-based technologies. Climate policy in Colombia is under development and has yet to consider economic instruments such as taxes and abatement targets. This paper shows how taxes or abatement targets can achieve significant CO2 reductions in Colombia. Though abatement may be achieved through different pathways, taxes and targets promote the entry of cleaner energy sources into the market and reduce final energy demand through energy efficiency improvements and other demand-side responses. The electric power sector plays an important role in achieving CO2 emission reductions in Colombia, through the increase of hydropower, the introduction of wind technologies, and the deployment of biomass, coal and natural gas with CO2 capture and storage (CCS). Uncertainty over the prevailing mitigation pathway reinforces the importance of climate policy to guide sectors toward low-carbon technologies. This paper also assesses the economy-wide implications of mitigation policies such as potential losses in GDP and consumption. An assessment of the legal, institutional, social and environmental barriers to economy-wide mitigation policies is critical yet beyond the scope of this paper.

Suggested Citation

  • Calderón, Silvia & Alvarez, Andrés Camilo & Loboguerrero, Ana María & Arango, Santiago & Calvin, Katherine & Kober, Tom & Daenzer, Kathryn & Fisher-Vanden, Karen, 2016. "Achieving CO2 reductions in Colombia: Effects of carbon taxes and abatement targets," Energy Economics, Elsevier, vol. 56(C), pages 575-586.
  • Handle: RePEc:eee:eneeco:v:56:y:2016:i:c:p:575-586
    DOI: 10.1016/j.eneco.2015.05.010
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    References listed on IDEAS

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    1. Allison Thomson & Katherine Calvin & Steven Smith & G. Kyle & April Volke & Pralit Patel & Sabrina Delgado-Arias & Ben Bond-Lamberty & Marshall Wise & Leon Clarke & James Edmonds, 2011. "RCP4.5: a pathway for stabilization of radiative forcing by 2100," Climatic Change, Springer, vol. 109(1), pages 77-94, November.
    2. van der Zwaan, Bob & Kober, Tom & Calderon, Silvia & Clarke, Leon & Daenzer, Katie & Kitous, Alban & Labriet, Maryse & Lucena, André F.P. & Octaviano, Claudia & Di Sbroiavacca, Nicolas, 2016. "Energy technology roll-out for climate change mitigation: A multi-model study for Latin America," Energy Economics, Elsevier, vol. 56(C), pages 526-542.
    3. Lawrence Goulder, 1995. "Environmental taxation and the double dividend: A reader's guide," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 157-183, August.
    4. van der Zwaan, Bob & Keppo, Ilkka & Johnsson, Filip, 2013. "How to decarbonize the transport sector?," Energy Policy, Elsevier, vol. 61(C), pages 562-573.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Climate change mitigation; Carbon taxes; CO2 abatement targets; Energy modeling;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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