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Reducing CO2-Emissions Under Fiscal Retrenchment: A Multi-Cohort CGE-Model for Austria

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  • K. Farmer
  • K.W. Steininger

Abstract

The stabilization of budget deficit and budget debt ratios by fiscal retrenchment in order to fulfill the Maastricht criteria for the EMU is of central focus in most EU countries. At the same time the national policy dimension of acute environmental problems such as global warming has receded in the public eye. The environmental dimension nonetheless remains urgent, and a re-evaluation of the prospects of CO2-policy is needed against the background of fiscal retrenchment required by supranational obligations. We shall do this for the small, open, Austrian economy by constructing a dynamic multi-cohort CGE model enabling us to assess quantitatively the lifetime welfare impacts on the cohorts affected by three different options for using CO2-permit revenues. The distribution of welfare costs of (Toronto-) CO2-policy across cohorts significantly differs with use. This is explained by income, inheritance and price effects. Copyright Kluwer Academic Publishers 1999

Suggested Citation

  • K. Farmer & K.W. Steininger, 1999. "Reducing CO2-Emissions Under Fiscal Retrenchment: A Multi-Cohort CGE-Model for Austria," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 13(3), pages 309-340, April.
  • Handle: RePEc:kap:enreec:v:13:y:1999:i:3:p:309-340 DOI: 10.1023/A:1008243611666
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Karl Steininger, 2002. "The Foreign Trade and Sectoral Impact of Truck Road Pricing for Cross-Border Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(2), pages 213-253, October.
    2. Karl Steininger & Herbert Voraberger, 2003. "Exploiting the Medium Term Biomass Energy Potentials in Austria: A Comparison of Costs and Macroeconomic Impact," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(4), pages 359-377, April.
    3. Birgit Friedl & Karl Steininger, 2002. "Environmentally Sustainable Transport: Definition and Long-Term Economic Impacts for Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 29(2), pages 163-180, June.

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