IDEAS home Printed from https://ideas.repec.org/p/fem/femwpa/2007.7.html
   My bibliography  Save this paper

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

Author

Listed:
  • Robert Küster

    (Universität Stuttgart)

  • ingo Ellersdorfer

    (Universität Stuttgart)

  • Ulrich Fahl

    (Universität Stuttgart)

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

  • Robert Küster & ingo Ellersdorfer & Ulrich Fahl, 2007. "A CGE-Analysis of Energy Policies Considering Labor Market Imperfections and Technology Specifications," Working Papers 2007.7, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2007.7
    as

    Download full text from publisher

    File URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-007.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bosello, Francesco & Carraro, Carlo, 2001. "Recycling energy taxes: impacts on a disaggregated labour market," Energy Economics, Elsevier, vol. 23(5), pages 569-594, September.
    2. Liu, Jing & van Leeuwen, Nico & Vo, Tri Thanh & Tyers, Rodney & Hertel, Thomas W., 1998. "Disaggregating Labor Payments By Skill Level In Gtap," Technical Papers 28722, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
    4. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
    5. Bohringer, Christoph & Boeters, Stefan & Feil, Michael, 2005. "Taxation and unemployment: an applied general equilibrium approach," Economic Modelling, Elsevier, vol. 22(1), pages 81-108, January.
    6. repec:bla:scandj:v:92:y:1990:i:2:p:215-35 is not listed on IDEAS
    7. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
    8. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-468, November.
    9. David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
    10. Böhringer, Christoph & Ruocco, Anna & Wiegard, Wolfgang, 2001. "Energy taxes and employment: a do-it-yourself simulation model," ZEW Discussion Papers 01-21, ZEW - Leibniz Centre for European Economic Research.
    11. Christoph Böhringer & Andreas Löschel, 2004. "Die Messung nachhaltiger Entwicklung mithilfe numerischer Gleichgewichtsmodelle," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 73(1), pages 31-52.
    12. Sue Wing, Ian, 2008. "The synthesis of bottom-up and top-down approaches to climate policy modeling: Electric power technology detail in a social accounting framework," Energy Economics, Elsevier, vol. 30(2), pages 547-573, March.
    13. Carraro, Carlo & Galeotti, Marzio & Gallo, Massimo, 1996. "Environmental taxation and unemployment: Some evidence on the 'double dividend hypothesis' in Europe," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 141-181, October.
    14. Springer, Katrin, 1999. "Climate policy and trade: Dynamics and the steady-state assumption in a multi-regional framework," Kiel Working Papers 952, Kiel Institute for the World Economy (IfW Kiel).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Randall W. Jackson & Amir Borges Ferreira Neto & Elham Erfanian & Péter Járosi, 2019. "Woody Biomass Processing and Rural Regional Development," Economic Development Quarterly, , vol. 33(3), pages 234-247, August.
    2. Shibasaki, Ryuichi & Yonemoto, Kiyoshi & Watanabe, Tomihiro, 2008. "On the effects of trade liberalization policies on regional economies based on "Transnational Interregional Input-Output Table between China and Japan"," Conference papers 331790, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Erisa Dautaj Şenerdem & K. Ali Akkemik, 2020. "Evaluation of the reform in the Turkish electricity sector: a CGE analysis," International Journal of Economic Policy Studies, Springer, vol. 14(2), pages 389-419, August.
    4. 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.
    5. Kenneth Castellanos & Garth Heutel, 2024. "Unemployment, Labor Mobility, and Climate Policy," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 11(1), pages 1-40.
    6. 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.
    7. Mu, Yaqian & Cai, Wenjia & Evans, Samuel & Wang, Can & Roland-Holst, David, 2018. "Employment impacts of renewable energy policies in China: A decomposition analysis based on a CGE modeling framework," Applied Energy, Elsevier, vol. 210(C), pages 256-267.
    8. Shiro Takeda & Toshi H. Arimura & Makoto Sugino, 2019. "Labor Market Distortions and Welfare-Decreasing International Emissions Trading," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 271-293, September.
    9. Mu, Yaqian & Wang, Can & Cai, Wenjia, 2018. "The economic impact of China's INDC: Distinguishing the roles of the renewable energy quota and the carbon market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2955-2966.
    10. Rivers, Nicholas, 2013. "Renewable energy and unemployment: A general equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 35(4), pages 467-485.
    11. 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.
    12. Ignacio Cazcarro & Rosa Duarte & Julio Sánchez Chóliz & Cristina Sarasa & Ana Serrano, 2016. "Modelling regional policy scenarios in the agri-food sector: a case study of a Spanish region," Applied Economics, Taylor & Francis Journals, vol. 48(16), pages 1463-1480, April.
    13. Duarte, Rosa & Feng, Kuishuang & Hubacek, Klaus & Sánchez-Chóliz, Julio & Sarasa, Cristina & Sun, Laixiang, 2016. "Modeling the carbon consequences of pro-environmental consumer behavior," Applied Energy, Elsevier, vol. 184(C), pages 1207-1216.
    14. 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.
    15. Kitwiwattanachai, Anyarath & Nelson, Doug & Reed, Geoffrey, 2010. "Quantitative impacts of alternative East Asia Free Trade Areas: A Computable General Equilibrium (CGE) assessment," Journal of Policy Modeling, Elsevier, vol. 32(2), pages 286-301, March.
    16. Kiula, Olga & Markandya, Anil & Ščasný, Milan & Menkyna Tsuchimoto, Fusako, 2014. "The Economic and Environmental Effects of Taxing Air Pollutants and CO2: Lessons from a Study of the Czech Republic," MPRA Paper 66599, University Library of Munich, Germany, revised Oct 2015.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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).
    2. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1645-1718, Elsevier.
    3. Markandya, Anil & González-Eguino, Mikel & Escapa, Marta, 2013. "From shadow to green: Linking environmental fiscal reforms and the informal economy," Energy Economics, Elsevier, vol. 40(S1), pages 108-118.
    4. Céline Guivarch & Renaud Crassous & Olivier Sassi & Stéphane Hallegatte, 2011. "The costs of climate policies in a second-best world with labour market imperfections," Climate Policy, Taylor & Francis Journals, vol. 11(1), pages 768-788, January.
    5. Fæhn, Taran & Gómez-Plana, Antonio G. & Kverndokk, Snorre, 2009. "Can a carbon permit system reduce Spanish unemployment?," Energy Economics, Elsevier, vol. 31(4), pages 595-604, July.
    6. Anyarath Kitwiwattanachai & Doug Nelson & Geoffrey Reed, 2007. "Quantitative Impacts of East Asia Free Trade Area: A Computable General Equilibrium Modelling," EcoMod2007 23900043, EcoMod.
    7. Campbell III, Carl M., 2008. "An efficiency wage approach to reconciling the wage curve and the Phillips curve," Labour Economics, Elsevier, vol. 15(6), pages 1388-1415, December.
    8. Anil Markandya & Mikel González- Eguino & Marta Escapa, 2012. "Environmental fiscal reform and unemployment in Spain," Chapters, in: Larry Kreiser & Ana Yábar Sterling & Pedro Herrera & Janet E. Milne & Hope Ashiabor (ed.), Carbon Pricing, Growth and the Environment, chapter 1, pages 3-16, Edward Elgar Publishing.
    9. Blanchflower, David G. & Oswald, Andrew J., 2006. "The Wage Curve: An Entry Written for the New Palgrave, 2nd Edition," IZA Discussion Papers 2138, Institute of Labor Economics (IZA).
    10. Ana Maria Bonomi Barufi & Eduardo A. Haddad, Peter Nijkamp, 2016. "New evidence on the wage curve: non-linearities, urban size, and spatial scale in Brazil," Working Papers, Department of Economics 2016_39, University of São Paulo (FEA-USP).
    11. Sabien Dobbelaere & Jacques Mairesse, 2010. "Comparing Micro-evidence on Rent Sharing from Three Different Approaches," NBER Working Papers 16220, National Bureau of Economic Research, Inc.
    12. López Enciso, Enrique & Ramírez Giraldo, María Teresa (ed.), 2011. "Formación de precios y salarios en Colombia T.2," Books, Banco de la Republica de Colombia, volume 2, number 2011b-04, December.
    13. Marisa Carla Bucheli Anaya & Cecilia González Rodríguez-Villamil, 2012. "An estimation of the wage curve for Uruguay," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, June.
    14. David Blanchflower & Alex Bryson & Jackson Spurling, 2024. "The wage curve after the Great Recession," Economica, London School of Economics and Political Science, vol. 91(362), pages 653-668, April.
    15. Bernard Fingleton & Silvia Palombi, 2016. "Bootstrap J -Test for Panel Data Models with Spatially Dependent Error Components, a Spatial Lag and Additional Endogenous Variables," Spatial Economic Analysis, Taylor & Francis Journals, vol. 11(1), pages 7-26, March.
    16. Bernard Fingleton & Simonetta Longhi, 2013. "The Effects Of Agglomeration On Wages: Evidence From The Micro-Level," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 443-463, August.
    17. Jean‐François Fagnart & Marc Germain & Bruno Van der Linden, 2023. "Working time reduction and employment in a finite world," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 170-207, January.
    18. Céline Guivarch & Renaud Crassous & Olivier Sassi & Stéphane Hallegatte, 2009. "The costs of climate policies in a second best world with labour market," CIRED Working Papers hal-00866429, HAL.
    19. Gaston, Noel & Rajaguru, Gulasekaran, 2013. "How an export boom affects unemployment," Economic Modelling, Elsevier, vol. 30(C), pages 343-355.
    20. Baltagi, Badi H. & Rokicki, Bartlomiej, 2014. "The spatial Polish wage curve with gender effects: Evidence from the Polish Labor Survey," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 36-47.

    More about this item

    Keywords

    CGE; Energy Economic Analysis; Employment Impact; Choice of Technology;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2007.7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alberto Prina Cerai The email address of this maintainer does not seem to be valid anymore. Please ask Alberto Prina Cerai to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.