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Energy market projections and differentiated carbon abatement in the European Union

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  • Böhringer, Christoph
  • Jensen, Jesper
  • Rutherford, Thomas F.

Abstract

We analyze the economic effects of the differentiated targets for carbon abatement in six European Union member states. Our recursively-dynamic model includes a detailed representation of trade and energy consumption and incorporates optimistic projections for future energy markets provided by the European Commission as the Business-as-Usual scenario. In the base case we find that the EU implementation of the Kyoto Protocol implies low overall costs and a relatively even cost distribution across member states. We also show that a less optimistic development in energy efficiency implies higher costs in all countries, especially in those with high abatement costs. Finally, we find that uniform abatement targets increase overall costs marginally but changes the cost distribution significantly, holding total EU emissions constant.

Suggested Citation

  • Böhringer, Christoph & Jensen, Jesper & Rutherford, Thomas F., 1999. "Energy market projections and differentiated carbon abatement in the European Union," ZEW Discussion Papers 99-11, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:5228
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    References listed on IDEAS

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    1. Stef Proost & John B. Braden (ed.), 1998. "Climate Change, Transport and Environmental Policy," Books, Edward Elgar Publishing, number 1276, December.
    2. Alan S. Manne & Richard G. Richels, 1994. "The Costs of Stabilizing Global CO2 Emissions: A Probabilistic Analysis Based on Expert Judgments," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 31-56.
    3. Klaus Conrad & Tobias Schmidt, 1998. "Economic Effects of an Uncoordinated Versus a Coordinated Carbon Dioxide Policy in the European Union: An Applied General Equilibrium Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 10(2), pages 161-182.
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    Cited by:

    1. Böhringer, Christoph, 2001. "Climate politics from Kyoto to Bonn: from little to nothing?!?," ZEW Discussion Papers 01-49, ZEW - Leibniz Centre for European Economic Research.
    2. Böhringer, Christoph & Lange, Andreas, 2003. "Efficiency, Compensation, and Discrimination: What is at Stake When Implementing the EU Emissions Trading Scheme?," ZEW Discussion Papers 03-73, ZEW - Leibniz Centre for European Economic Research.
    3. Böhringer, Christoph & Vogt, Carsten, 2001. "Internationaler Klimaschutz: Nicht mehr als symbolische Politik?," ZEW Discussion Papers 01-06, ZEW - Leibniz Centre for European Economic Research.
    4. Böhringer, Christoph & Rutherford, Thomas F., 2000. "Decomposing the cost of Kyoto: a global CGE analysis of multilateral policy impacts," ZEW Discussion Papers 00-11, ZEW - Leibniz Centre for European Economic Research.
    5. Anger, Niels & Böhringer, Christoph & Moslener, Ulf, 2007. "Macroeconomic Impacts of the Clean Development Mechanism: The Role of Investment Barriers and Regulations," ZEW Discussion Papers 07-026, ZEW - Leibniz Centre for European Economic Research.
    6. Böhringer, Christoph & Welsch, Heinz, 1999. "C & C - contraction and convergence of carbon emissions: the economic implications of permit trading," ZEW Discussion Papers 99-13, ZEW - Leibniz Centre for European Economic Research.
    7. Böhringer, Christoph & Welsch, Heinz, 2001. "Contraction of global carbon emissions: how acceptable are alternative emission entitlement schemes," ZEW Discussion Papers 01-65, ZEW - Leibniz Centre for European Economic Research.
    8. Böhringer, Christoph, 2000. "Industry-level emission trading between power producers in the EU," ZEW Discussion Papers 00-46, ZEW - Leibniz Centre for European Economic Research.
    9. Kerkelä, Leena & Pohjola, Johanna & Mäkipää, Raisa, 2003. "Who Gains from Credited Forest Carbon Sinks: Finland and other Annex I Countries in Comparison," Discussion Papers 291, VATT Institute for Economic Research.

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