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A CGE-Analysis of Energy Policies Considering Labor Market Imperfections and Technology Specifications

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  • Kuster, Robert
  • Ellersdorfer, Ingo
  • Fahl, Ulrich

Abstract

The paper establishes a CGE/MPSGE model for evaluating energy policy measures with emphasis on their employment impacts. It specifies a dual labor market with respect to qualification, two different mechanisms for skill specific unemployment, and a technology detailed description of electricity generation. Non clearing of the dual labor market is modeled via minimum wage constraints and via wage curves. The model is exemplarily applied for the analysis of capital subsidies on the application of technologies using renewable energy sources. Quantitative results highlight that subsidies on these technologies do not automatically lead to a significant reduction in emissions. Moreover, if emission reductions are achieved these might actually partly result from negative growth effects induced by the promotion of cost inefficient technologies. Inefficiencies in the energy system increase unemployment for both skilled and unskilled labor.

Suggested Citation

  • Kuster, Robert & Ellersdorfer, Ingo & Fahl, Ulrich, 2007. "A CGE-Analysis of Energy Policies Considering Labor Market Imperfections and Technology Specifications," Climate Change Modelling and Policy Working Papers 12035, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcc:12035
    DOI: 10.22004/ag.econ.12035
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    References listed on IDEAS

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    15. Ruslana Palatnik & Mordechai Shechter, 2008. "Can Climate Change Mitigation Policy Benefit the Israeli Economy? A Computable General Equilibrium Analysis," Working Papers 2008.2, Fondazione Eni Enrico Mattei.
    16. Mu, Yaqian & Evans, Samuel & Wang, Can & Cai, Wenjia, 2018. "How will sectoral coverage affect the efficiency of an emissions trading system? A CGE-based case study of China," Applied Energy, Elsevier, vol. 227(C), pages 403-414.
    17. Trink, Thomas & Schmid, Christoph & Schinko, Thomas & Steininger, Karl W. & Loibnegger, Thomas & Kettner, Claudia & Pack, Alexandra & Töglhofer, Christoph, 2010. "Regional economic impacts of biomass based energy service use: A comparison across crops and technologies for East Styria, Austria," Energy Policy, Elsevier, vol. 38(10), pages 5912-5926, October.
    18. Yeo, Yeongjun & Hwang, Won-Sik & Shin, Kiyoon & Hong, Chanyoung & Oh, Inha & Jung, Sungmoon & Lee, Jeong-Dong, 2025. "Dualistic nature of the 4IR: Investigating the economy-wide impacts of the 4IR with a focus on Korean economy using a CGE analysis," Telecommunications Policy, Elsevier, vol. 49(3).
    19. Muritala Taiwo Adewale & Awolaja Ayodeji Muyideen & James Olurotimi, 2013. "Impact of Climate Change on Employment in Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 9(3), pages 153-161, June.
    20. Witajewski-Baltvilks Jan & Boratyński Jakub, 2021. "Workers or Consumers: Who Pays for Low-Carbon Transition – Theoretical Analysis of Welfare Change in General Equilibrium Setting," Central European Economic Journal, Sciendo, vol. 8(55), pages 231-245, January.

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