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Evaluation of the Costs and Benefits of EU-Wide Emission Trade for Finland

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  • Forsström, Juha
  • Honkatukia, Juha
  • Sulamaa, Pekka

Abstract

This study assesses the economic impacts of the proposed EU-wide emission trade both on the European union as a whole and on Finland in particular. The study utilises the global GTAP-E- CGE-model to analyse Europe-wide impacts and a Finland-specific, hybrid, CGE-model to study the impacts on the Finnish economy. The main finding of the study is that at a European level, emission trade appears to be very beneficial. However, emission trade along the lines of the EU Emission trade directive would not necessarily lower the macroeconomic costs of green house gas abatement in Finland, since it might very well misallocate quotas among the trading sectors on the one hand, and between the trading sectors and the rest of the economy on the other. Abatement costs might be lowered within some of the trading sectors, however.

Suggested Citation

  • Forsström, Juha & Honkatukia, Juha & Sulamaa, Pekka, 2002. "Evaluation of the Costs and Benefits of EU-Wide Emission Trade for Finland," Conference papers 331014, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331014
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    File URL: https://ageconsearch.umn.edu/record/331014/files/412.pdf
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    References listed on IDEAS

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    1. Jean-Marc Burniaux & Joaquim Oliveira Martins, 2000. "Carbon Emission Leakages: A General Equilibrium View," OECD Economics Department Working Papers 242, OECD Publishing.
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