Template-Type: ReDIF-Article 1.0
Author-Name:  John Pezzey
Title:  Analysis of Unilateral CO2 Control in the European Community and OECD
Classification-JEL: F0
Pages:  159-172
Volume:  Volume 13
Issue:  Number 3
Year:  1992
Abstract:  Whalley and Wigle (1991b) use a static, six-region, perfect competition, general equilibrium model to explore various global carbon tax policies designed to cut CO2 emissions. Their program is used here to model unilateral carbon taxes applied by large regions such as the EC or the OECD. Sample model results suggest that a 20% unilateral cut in EC carbon-based energy consumption achieves a 0.7% cut in world consumption in equilibrium; the ECs production of energy-intensive goods falls by 8.3%; but EC welfare is hardly changed, thanks to a shift in consumption towards nonenergy-intensive goods and to cheaper carbon-based energy imports. Unilateral action, even by large economies, therefore seems to be environmentally ineffective but economically neutral overall. However, international leadership effects or induced technical progress might change these conclusions. Also, Perroni and Rutherford (1991) find less extreme results for similar policies, probably because they model world energy markets very differently.
Handle: RePEc:aen:journl:1992v13-03-a08
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=1078
File-Format: text/html
File-Restriction: Access to full text is restricted to IAEE members and subscribers.