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What a difference carbon leakage correction makes!

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  • Thomas Grebel

    (TU Ilmenau)

Abstract

In this paper, we investigate the effect of carbon leakage correction when turning from a production-based to a consumption-based approach. We consider six different regulatory regimes. For calculating carbon leakage corrections, we employ the Leontief Inverse derived from WIOD input/output tables. To account for country-specific characteristics we use OECD data. As modelling technique, we apply a non-parametric productivity estimation approach (Data Envelopment Analysis) to calculate relative efficiency scores of countries’ environmental performance to take their heterogeneity into account. The results suggest that irrespective of the chosen policy regime, the correction for carbon leakage will always lead to a significant reduction of emissions. The average effect of leakage correction amounts to 37% less CO2 emissions.

Suggested Citation

  • Thomas Grebel, 2019. "What a difference carbon leakage correction makes!," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 939-971, July.
    • Handle: RePEc:spr:joevec:v:29:y:2019:i:3:d:10.1007_s00191-019-00629-8
    DOI: 10.1007/s00191-019-00629-8
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    More about this item

    Keywords

    Energy efficiency; CO2-emissions; DEA; Benchmarking;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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