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Value Added in Motion: Macroeconomic Implications of Energy Price Trajectories

Author

Listed:
  • Lionel Fontagné

    (PSE (Paris 1) and CEPII)

  • Jean Fouré

    (CEPII)

  • Gianluca Santoni

    (CEPII)

Abstract

Taking a 2035 horizon, we examine how world energy consumption and emission patterns will be shaped by the changing demand and technological capabilities of different regions. We combine a convergence model fitting three production factors (capital, labour and energy) and two factor-specific productivities, along with a dynamic CGE model of the world economy. We consider three possible “worlds” with very different energy scarcity, and how Copenhagen pledges change economic agents’ calculus in each of these three situations. We find that the most dramatic changes in terms of location of value added are to be expected from the intrinsic differences among the three considered “worlds”, not so much in terms of economic impact of environmental pledges.

Suggested Citation

  • Lionel Fontagné & Jean Fouré & Gianluca Santoni, 2017. "Value Added in Motion: Macroeconomic Implications of Energy Price Trajectories," Development Working Papers 426, Centro Studi Luca d'Agliano, University of Milano.
    • Handle: RePEc:csl:devewp:426
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    References listed on IDEAS

    as
    1. Rubashkina, Yana & Galeotti, Marzio & Verdolini, Elena, 2015. "Environmental regulation and competitiveness: Empirical evidence on the Porter Hypothesis from European manufacturing sectors," Energy Policy, Elsevier, vol. 83(C), pages 288-300.
    2. Brigitte Knopf & Yen-Heng Henry Chen & Enrica De Cian & Hannah Förster & Amit Kanudia & Ioanna Karkatsouli & Ilkka Keppo & Tiina Koljonen & Katja Schumacher & Detlef P. Van Vuuren, 2013. "Beyond 2020 — Strategies And Costs For Transforming The European Energy System," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(supp0), pages 1-38.
    3. Decreux, Yvan & Valin, Hugo, 2007. "MIRAGE, Updated Version of the Model for Trade Policy Analysis: Focus on Agriculture and Dynamics," Working Papers 7284, TRADEAG - Agricultural Trade Agreements.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Lionel Fontagné & Gianluca Santoni, 2017. "Value Added in Motion: Determinants of Value Added Location within the EU," Development Working Papers 424, Centro Studi Luca d'Agliano, University of Milano.

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    More about this item

    Keywords

    Growth; Macroeconomic Projections; long run; global economy;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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