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- ItemMitigating poverty: The patterns of multiple carbon tax and recycling regimes for Peru(Amsterdam [u.a.] : Elsevier Science, 2021) Malerba, Daniele; Gaentzsch, Anja; Ward, HaukeCarbon taxes are an economically effective and efficient policy measure to address climate change mitigation. However, they can have severe adverse distributional effects. Recycling parts of the fiscal revenues to vulnerable, lower income households through cash transfers (social assistance) is an option to also overcome associated political difficulties. This paper simulates the distributional impacts of such a combined policy reform in Peru. In a first step, we assess the distributional impacts of varying carbon tax rates. In a second step, we evaluate different scenarios of recycling revenues through existing or expanded transfer schemes towards vulnerable households. The results indicate that a national carbon tax, without compensation, would increase poverty but have no significant impact on inequality. When tax revenues are recycled through transfer schemes, however, poverty would actually decrease. Depending on the amount to be redistributed and the design of the cash transfer scheme, our simulations show a proportional reduction in the poverty headcount of up to around 17%. In addition, the paper underlines how crucial it is to go beyond aggregate measures of poverty to better identify losers from such reform; and assure that the “leave no one behind” principle of the Sustainable Development Goals (SDGs) is addressed.
- ItemReviewing the Market Stability Reserve in light of more ambitious EU ETS emission targets(Amsterdam [u.a.] : Elsevier Science, 2021) Osorio, Sebastian; Tietjen, Oliver; Pahle, Michael; Pietzcker, Robert C.; Edenhofer, OttmarThe stringency of the EU's Emission Trading System (ETS) is bound to be ratcheted-up to deliver on more ambitious goals as formulated in the EU's Green Deal. Tightening the cap needs to consider the interactions with the Market Stability Reserve (MSR), which will be reviewed in 2021. We analyse these issues using the model LIMES-EU. First, we examine how revising MSR parameters impacts allowance cancellations. We find that varying key design parameters leads to cancellations in the range of 2.6–7.9 Gt – compared to 5.1 Gt under current regulation. Overall, the bank thresholds, which define when there is intake to/outtake from the MSR, have the highest impact. Intake rates above 12% only have a limited effect, and cause oscillatory intake behaviour. Second, we analyse how more ambitious climate 2030 targets can be achieved by adjusting the linear reduction factor (LRF). We find that the LRF increases MSR cancellations substantially up to 10.0 Gt. This implies that increasing its value from currently 2.2% to only 2.6% could be consistent with an EU-wide target of −55% by 2030. However, MSR cancellations are subject to large uncertainty, which increases the complexity of the market and induces high price uncertainty.
- ItemHow global climate policy could affect competitiveness(Amsterdam [u.a.] : Elsevier Science, 2019) Ward, Hauke; Steckel, Jan Christoph; Jakob, MichaelA global uniform carbon price would be economically efficient and at the same time avoid ‘carbon-leakage’. Still, it will affect the competitiveness of specific industries, economic activity and employment across countries. This paper assesses short-term economic shocks following the introduction of a global carbon price that would be in line with the Paris Agreement. Based on the World Input-Output Database (WIOD), we trace the carbon content of final output through global supply chains. This allows us to estimate how prices of the final output would react to the introduction of a global carbon price. We find that impacts on industrial competitiveness are highly heterogeneous across regions and economic sectors. The competitive position of Brazil, Japan, the USA and advanced economies of the EU is likely to improve, whereas industries and labor markets in newly industrializing Asian economies as well as Eastern Europe are likely to experience substantial adverse impacts. © 2019 The Author(s)
- ItemFuture changes in consumption: The income effect on greenhouse gas emissions(Amsterdam [u.a.] : Elsevier Science, 2021) Bjelle, Eivind Lekve; Wiebe, Kirsten S.; Többen, Johannes; Tisserant, Alexandre; Ivanova, Diana; Vita, Gibran; Wood, RichardThe scale and patterns of household consumption are important determinants of environmental impacts. Whilst affluence has been shown to have a strong correlation with environmental impact, they do not necessarily grow at the same rate. Given the apparent contradiction between the sustainable development goals of economic growth and environmental protection, it is important to understand the effect of rising affluence and concurrent changing consumption patterns on future environmental impacts. Here we develop an econometric demand model based on the data available from a global multiregional input-output dataset. We model future household consumption following scenarios of population and GDP growth for 49 individual regions. The greenhouse gas (GHG) emissions resulting from the future household demand is then explored both with and without consideration of the change in expenditure over time on different consumption categories. Compared to a baseline scenario where final demand grows in line with the 2011 average consumption pattern up until 2030, we find that changing consumer preferences with increasing affluence has a small negative effect on global cumulative GHG emissions. The differences are more profound on both a regional and a product level. For the demand model scenario, we find the largest decrease in GHG emissions for the BRICS and other developing countries, while emissions in North America and the EU remain unchanged. Decreased spending and resulting emissions on food are cancelled out by increased spending and emissions on transportation. Despite relatively small global differences between the scenarios, the regional and sectoral wedges indicate that there is a large untapped potential in environmental policies and lifestyle changes that can complement the technological transition towards a low-emitting society.
- ItemSystem complexity and policy integration challenges: The Brazilian Energy- Water-Food Nexus(Amsterdam [u.a.] : Elsevier Science, 2019) Mercure, J.-F.; Paim, M.A.; Bocquillon, P.; Lindner, S.; Salas, P.; Martinelli, P.; Berchin, I.I.; de Andrade Guerra, J.B.S.O; Derani, C.; de Albuquerque Junior, C.L.; Ribeiro, J.M.P.; Knobloch, F.; Pollitt, H.; Edwards, N.R.; Holden, P.B.; Foley, A.; Schaphoff, S.; Faraco, R.A.; Vinuales, J.E.The Energy-Water-Food Nexus is one of the most complex sustainability challenges faced by the world. This is particularly true in Brazil, where insufficiently understood interactions within the Nexus are contributing to large-scale deforestation and land-use change, water and energy scarcity, and increased vulnerability to climate change. The reason is a combination of global environmental change and global economic change, putting unprecedented pressures on the Brazilian environment and ecosystems. In this paper, we identify and discuss the main Nexus challenges faced by Brazil across sectors (e.g. energy, agriculture, water) and scales (e.g. federal, state, municipal). We use four case studies to explore all nodes of the Nexus. For each, we analyse data from economic and biophysical modelling sources in combination with an overview of the legislative and policy landscape, in order to identify governance shortcomings in the context of growing challenges. We analyse the complex interdependence of developments at the global and local (Brazilian) levels, highlighting the impact of global environmental and economic change on Brazil and, conversely, that of developments in Brazil for other countries and the world. We conclude that there is a need to adjust the scientific approach to these challenges as an enabling condition for stronger science-policy bridges for sustainability policy-making. © 2019 The Author(s)