IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc16/145800.html
   My bibliography  Save this paper

The Co-Benefits Of Climate Policy: Evidence From The Eu Emissions Trading Scheme

Author

Listed:
  • Wagner, Ulrich J.
  • De Preux, Laure

Abstract

Carbon dioxide (CO2) emissions are known to cause global climate change but no damage to the local environment. However, because CO2 is often jointly produced with other substances that pollute the environment, CO2 abatement may generate ancillary benefits, especially for human health. Previous research suggests that these co-benefits can offset a substantial share of the economic costs of mitigation policies. This paper conducts the first empirical test of this hypothesis in the context of the European Emissions Trading Scheme (EU ETS) for CO2. The econometric analysis exploits comprehensive microdata on discharges of more than 90 different pollutants into air, water and soil, at more than 28,000 commercial installations in 31 European countries. It is found that the EU ETS decreased air releases of some pollutants while increasing water releases of other pollutants. Moreover, in some cases the patterns of spatial redistribution are strongly correlated with income, population size or age. The implications for the efficiency and environmental justice of the EU ETS are discussed.

Suggested Citation

  • Wagner, Ulrich J. & De Preux, Laure, 2016. "The Co-Benefits Of Climate Policy: Evidence From The Eu Emissions Trading Scheme," VfS Annual Conference 2016 (Augsburg): Demographic Change 145800, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc16:145800
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/145800/1/VfS_2016_pid_6839.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Henderson, J Vernon, 1996. "Effects of Air Quality Regulation," American Economic Review, American Economic Association, vol. 86(4), pages 789-813, September.
    2. Rypdal, Kristin & Rive, Nathan & Astrom, Stefan & Karvosenoja, Niko & Aunan, Kristin & Bak, Jesper L. & Kupiainen, Kaarle & Kukkonen, Jaakko, 2007. "Nordic air quality co-benefits from European post-2012 climate policies," Energy Policy, Elsevier, vol. 35(12), pages 6309-6322, December.
    3. Petrick, Sebastian & Wagner, Ulrich J., 2014. "The impact of carbon trading on industry: Evidence from German manufacturing firms," Kiel Working Papers 1912, Kiel Institute for the World Economy (IfW).
    4. Randy Becker & Vernon Henderson, 2000. "Effects of Air Quality Regulations on Polluting Industries," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 379-421, April.
    5. Montgomery, W. David, 1972. "Markets in licenses and efficient pollution control programs," Journal of Economic Theory, Elsevier, vol. 5(3), pages 395-418, December.
    6. Meredith Fowlie & Stephen P. Holland & Erin T. Mansur, 2012. "What Do Emissions Markets Deliver and to Whom? Evidence from Southern California's NOx Trading Program," American Economic Review, American Economic Association, vol. 102(2), pages 965-993, April.
    7. Robert N. Stavins, 2011. "The Problem of the Commons: Still Unsettled after 100 Years," American Economic Review, American Economic Association, vol. 101(1), pages 81-108, February.
    8. Montero, Juan-Pablo, 2002. "Permits, Standards, and Technology Innovation," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 23-44, July.
    9. Ekins, Paul, 1996. "How large a carbon tax is justified by the secondary benefits of CO2 abatement?," Resource and Energy Economics, Elsevier, vol. 18(2), pages 161-187, June.
    10. Martin, Ralf & de Preux, Laure B. & Wagner, Ulrich J., 2014. "The impact of a carbon tax on manufacturing: Evidence from microdata," Journal of Public Economics, Elsevier, vol. 117(C), pages 1-14.
    11. Pittel, Karen & Rübbelke, Dirk T.G., 2008. "Climate policy and ancillary benefits: A survey and integration into the modelling of international negotiations on climate change," Ecological Economics, Elsevier, vol. 68(1-2), pages 210-220, December.
    12. Burtraw, Dallas & Krupnick, Alan & Palmer, Karen & Paul, Anthony & Toman, Michael & Bloyd, Cary, 2003. "Ancillary benefits of reduced air pollution in the US from moderate greenhouse gas mitigation policies in the electricity sector," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 650-673, May.
    13. Ekin, Paul, 1996. "The secondary benefits of CO2 abatement: How much emission reduction do they justify?," Ecological Economics, Elsevier, vol. 16(1), pages 13-24, January.
    14. Michael Greenstone, 2002. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1175-1219, December.
    15. repec:dau:papers:123456789/10174 is not listed on IDEAS
    16. van Vuuren, D.P. & Cofala, J. & Eerens, H.E. & Oostenrijk, R. & Heyes, C. & Klimont, Z. & den Elzen, M.G.J. & Amann, M., 2006. "Exploring the ancillary benefits of the Kyoto Protocol for air pollution in Europe," Energy Policy, Elsevier, vol. 34(4), pages 444-460, March.
    17. Aunan, Kristin & Berntsen, Terje & O'Connor, David & Persson, Therese Hindman & Vennemo, Haakon & Zhai, Fan, 2007. "Benefits and costs to China of a climate policy," Environment and Development Economics, Cambridge University Press, vol. 12(3), pages 471-497, June.
    18. Milliman, Scott R. & Prince, Raymond, 1989. "Firm incentives to promote technological change in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 247-265, November.
    19. Nicholas Z. Muller & Robert Mendelsohn, 2009. "Efficient Pollution Regulation: Getting the Prices Right," American Economic Review, American Economic Association, vol. 99(5), pages 1714-1739, December.
    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. Thomas Grebel, 2019. "What a difference carbon leakage correction makes!," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 939-971, July.

    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. Martin, Ralf & de Preux, Laure B. & Wagner, Ulrich J., 2014. "The impact of a carbon tax on manufacturing: Evidence from microdata," Journal of Public Economics, Elsevier, vol. 117(C), pages 1-14.
    2. Ralf Martin & Laure B. de Preux & Ulrich J. Wagner, 2009. "The impacts of the Climate Change Levy on business: evidence from microdata," GRI Working Papers 6, Grantham Research Institute on Climate Change and the Environment.
    3. Jonathan Colmer & Ralf Martin & Mirabelle Muûls & Ulrich J. Wagner, 2020. "Does pricing carbon mitigate climate change? Firm-level evidence from the European Union emissions trading scheme," CEP Discussion Papers dp1728, Centre for Economic Performance, LSE.
    4. Ralf Martin & Laure B. de Preux & Ulrich J. Wagner, 2011. "The Impacts of the Climate Change Levy on Manufacturing: Evidence from Microdata," NBER Working Papers 17446, National Bureau of Economic Research, Inc.
    5. Pittel, Karen & Rübbelke, Dirk T.G., 2008. "Climate policy and ancillary benefits: A survey and integration into the modelling of international negotiations on climate change," Ecological Economics, Elsevier, vol. 68(1-2), pages 210-220, December.
    6. Finus, Michael & Rubbelke, Dirk T G, 2008. "Coalition Formation and the Ancillary Benefits of Climate Policy," Stirling Economics Discussion Papers 2008-13, University of Stirling, Division of Economics.
    7. Michael Finus & Dirk Rübbelke, 2013. "Public Good Provision and Ancillary Benefits: The Case of Climate Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(2), pages 211-226, October.
    8. Milan Ščasný & Emanuele Massetti & Jan Melichar & Samuel Carrara, 2015. "Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(2), pages 383-415, October.
    9. Marit Klemetsen & Knut Einar Rosendahl & Anja Lund Jakobsen, 2020. "The Impacts Of The Eu Ets On Norwegian Plants’ Environmental And Economic Performance," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 11(01), pages 1-32, February.
    10. Curtis, E. Mark, 2020. "Reevaluating the ozone nonattainment standards: Evidence from the 2004 expansion," Journal of Environmental Economics and Management, Elsevier, vol. 99(C).
    11. Francesco Vona & Giovanni Marin & Davide Consoli & David Popp, 2015. "Green Skills," Working Papers 2015.72, Fondazione Eni Enrico Mattei.
    12. James Boyce & Manuel Pastor, 2012. "Cooling the Planet, Clearing the Air: Climate Policy, Carbon Pricing, and Co-Benefits," Published Studies cooling_the_planet_sept20, Political Economy Research Institute, University of Massachusetts at Amherst.
    13. Raphael Calel, 2020. "Adopt or Innovate: Understanding Technological Responses to Cap-and-Trade," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 170-201, August.
    14. Francesco Vona & Giovanni Marin & Davide Consoli & David Popp, 2018. "Environmental Regulation and Green Skills: An Empirical Exploration," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(4), pages 713-753.
    15. E. Mark Curtis, 2014. "Who Loses Under Power Plant Cap-and-Trade Programs?," NBER Working Papers 20808, National Bureau of Economic Research, Inc.
    16. Cui, Jingbo & Moschini, GianCarlo, 2020. "Firm internal network, environmental regulation, and plant death," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    17. Ikefuji, M. & Magnus, J.R. & Sakamoto, H., 2010. "Climate Change, Economic Growth, and Health," Discussion Paper 2010-86, Tilburg University, Center for Economic Research.
    18. Cohen, Alex & Keiser, David A., 2017. "The effectiveness of incomplete and overlapping pollution regulation: Evidence from bans on phosphate in automatic dishwasher detergent," Journal of Public Economics, Elsevier, vol. 150(C), pages 53-74.
    19. Jota Ishikawa & Toshihiro Okubo, 2017. "Greenhouse-Gas Emission Controls and Firm Locations in North–South Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(4), pages 637-660, August.
    20. Maximilian Auffhammer & Weizeng Sun & Jianfeng Wu & Siqi Zheng, 2016. "The Decomposition And Dynamics Of Industrial Carbon Dioxide Emissions For 287 Chinese Cities In 1998–2009," Journal of Economic Surveys, Wiley Blackwell, vol. 30(3), pages 460-481, July.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    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:zbw:vfsc16:145800. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - Leibniz Information Centre for Economics). General contact details of provider: https://edirc.repec.org/data/vfsocea.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.