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Sectoral Targets To Address Competitiveness — A Cge Analysis With Focus On The Global Steel Sector

Author

Listed:
  • VICKI DUSCHA

    (Fraunhofer Institute for Systems and Innovation Research, Breslauer Straße, 76139 Karlsruhe, Germany)

  • EVERETT B. PETERSON

    (#x2020;Department of Agricultural and Applied Economics, Virginia Polytechnic Institute and State University, 202A Hutcheson Hall, Blacksburg, VA 24061, USA)

  • JOACHIM SCHLEICH

    (Fraunhofer Institute for Systems and Innovation Research, Breslauer Straße, 76139 Karlsruhe, Germany†Department of Agricultural and Applied Economics, Virginia Polytechnic Institute and State University, 202A Hutcheson Hall, Blacksburg, VA 24061, USA‡Grenoble Ecole de Management Univ Grenoble Alpes ComUE, 12, rue Pierre Sémard, 38000 Grenoble, France)

  • KATJA SCHUMACHER

    (#xA7;Öko Institut, Schicklerstrasse 5-7, 10179 Berlin, Germany)

Abstract

In the wake of the Paris Climate Agreement, countries may employ sectoral approaches. These allow for efficiency gains while at the same time addressing the concerns of competitiveness and carbon leakage. Applying a multi-country, multi-sector dynamic CGE model, this paper explores the role of sector emission targets for the steel sector in an international agreement, their interaction with emissions trading systems, and to which extent sector targets may address competitiveness concerns. To better reflect technological realities, the steel sector is disaggregated into its two main industries: primary fossil fuel-based steel production (BOF) and secondary scrap recycling steel production (EAF). The policy simulations suggest that sectoral targets may effectively counter the (negative) output and competitiveness effects of differences in the stringency of climate policy across countries. BOF steel contributes significantly more to emission reductions than EAF steel. Moreover, the output effects of BOF and EAF are of opposite signs.

Suggested Citation

  • Vicki Duscha & Everett B. Peterson & Joachim Schleich & Katja Schumacher, 2019. "Sectoral Targets To Address Competitiveness — A Cge Analysis With Focus On The Global Steel Sector," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 10(01), pages 1-27, February.
    • Handle: RePEc:wsi:ccexxx:v:10:y:2019:i:01:n:s2010007819500015
    DOI: 10.1142/S2010007819500015
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