Download or read book Carbon Prices and Inflation in the Euro Area written by Maximilian Konradt and published by International Monetary Fund. This book was released on 2024-02-16 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: What is the effect of carbon pricing on inflation? This paper shows empirically that the consequences of the European Union’s Emission Trading System (ETS) and national carbon taxation on inflation have been limited in the euro area, so far. This result is supported by analysis based on a panel local projections approach, as well as event studies based on individual countries. Our estimates suggest that carbon taxes raised the price of energy but had limited effects on overall consumer prices. Since future climate policy will need to be much more ambitious compared to what has been observed so far, including the need for larger increases in carbon prices, possible non-linearities might make extrapolating from historical results difficult. We thus also use input-output tables to simulate the mechanical effect of a carbon tax consistent with the EU’s ‘Fit-for-55’ commitments on inflation. The required increase of effective carbon prices from around 40 Euro per ton of CO2 in 2021 to around 150 Euro by 2030 could raise annual euro area inflation by between 0.2 and 0.4 percentage points. It is worth noting that the energy price increases caused by the rise in the effective carbon price to 150 Euro is substantially smaller than the energy price spike seen in 2022 following the invasion of Ukraine.

Download or read book Markets for Carbon and Power Pricing in Europe written by Francesco Gullì and published by Edward Elgar Publishing. This book was released on 2009-01-01 with total page 253 pages. Available in PDF, EPUB and Kindle. Book excerpt: Whether it concerns environmental economics or law and economics, two areas of science in which I feel well at home, publisher Edward Elgar is a front-runner time and again with relevant and solid publications. This time is no exception, with this book edited by Francesco Gullì. Edwin Woerdman, Tijdschrift voor Energierecht Why do power prices seem to be correlated with the carbon price in some markets and not in others? This crucial question is at the centre of Francesco Gullì s enlightening book, through which the contributing authors investigate a number of related issues. In particular, they explore why power firms are not consistent in passing-through into power prices the opportunity cost of carbon. They also examine the relationship between the pass-through mechanism and the structure of the power market. This informative study brings together and interprets original contributions by leading experts from every EU country. Beginning with an overview of the European Union Emissions Trading System (EU ETS) along with an in-depth analysis of the early results and the theoretical issues involved, the book then goes on to explore the main European power markets via a number of empirical case studies. Overall, this volume offers a genuinely comprehensive analysis on the relationship between carbon and power markets and, as such, will prove a valuable contribution to the debate on the EU ETS and to the literature on the interaction between environmental policy and the structure of environmentally regulated markets. Markets for Carbon and Power Pricing in Europe will be of great interest to researchers and academics within general economics, environmental and energy economics. It will also be warmly welcomed by policymakers, regulators and power sector operators.

Download or read book Pricing Carbon written by A. Denny Ellerman and published by Cambridge University Press. This book was released on 2010-01-28 with total page 391 pages. Available in PDF, EPUB and Kindle. Book excerpt: The European Union's Emissions Trading Scheme (EU ETS) is the world's largest market for carbon and the most significant multinational initiative ever taken to mobilize markets to protect the environment. It will be an important influence on the development and implementation of trading schemes in the US, Japan, and elsewhere. However, as is true of any pioneering public policy experiment, this scheme has generated much controversy. Pricing Carbon provides the first detailed description and analysis of the EU ETS, focusing on the first 'trial' period of the scheme (2005–7). Written by an international team of experts, it allows readers to get behind the headlines and come to a better understanding of what was done and what happened based on a dispassionate, empirically based review of the evidence. This book should be read by anyone who wants to know what happens when emissions are capped, traded, and priced.

Download or read book Distributional Impacts of Heterogenous Carbon Prices in the EU written by Magnus Merkle and published by International Monetary Fund. This book was released on 2024-07-12 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyse the consequences of carbon price heterogeneity on households in The EU from 2010 to 2020. Accounting for both heterogeneity in carbon pricing across emission sources and the indirect effects from inter-industry linkages, we obtain two key findings. First, due to widespread carbon pricing exemptions, household burdens are lower than previously estimated. Second, lower-income groups are affected disproportionately, because they spend a smaller share of their expenditure on products that benefit from exemptions than their higher-income counterparts. Therefore, imposing uniform carbon prices both within and across countries would reduce carbon pricing regressivity on household expenditure in the EU. A global price would be most effective in this regard, as it would raise carbon prices embodied in EU imports. Further, because EU economies are open and apply higher average carbon prices than their trade partners, the domestic revenues exceed the costs embodied in EU household consumptions bundles. This increases the scope for reducing the burden of carbon pricing on lower-income households through revenue redistribution. Our results imply that the ongoing extension of carbon pricing to more sectors through the EU ETS II and the introduction of the EU’s CBAM should make carbon pricing less regressive, all else equal.

Download or read book Carbon Taxation in Europe written by David A. Weisbach and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The current pricing mechanism for carbon in the EU, the EU emissions trading system, only covers 40 percent of emissions. Carbon taxation currently plays no role. The Commission has recently proposed to revise the energy tax system in the EU to include a carbon tax component. This paper evaluates the Commission proposal and considers the possible expansion of the EU carbon pricing base either by expanding emissions trading to cover more sectors or by enacting a carbon tax. It concludes that there are strong arguments for expanding the carbon pricing base, as suggested by the Commission. Nevertheless, expanding the base should done through a unified system, such as expanding the coverage of the emissions trading system or enacting an economy-wide carbon tax rather than through having side-by-side taxes and trading, as in the Commission proposal.

Download or read book The Poverty and Distributional Impacts of Carbon Pricing Channels and Policy Implications written by Baoping Shang and published by International Monetary Fund. This book was released on 2021-06-25 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Addressing the poverty and distributional impacts of carbon pricing reforms is critical for the success of ambitious actions in the fight against climate change. This paper uses a simple framework to systematically review the channels through which carbon pricing can potentially affect poverty and inequality. It finds that the channels differ in important ways along several dimensions. The paper also identifies several key gaps in the current literature and discusses some considerations on how policy designs could take into account the attributes of the channels in mitigating the impacts of carbon pricing reforms on households.

Download or read book Econometric Analysis of Carbon Markets written by Julien Chevallier and published by Springer Science & Business Media. This book was released on 2011-09-21 with total page 238 pages. Available in PDF, EPUB and Kindle. Book excerpt: Through analysis of the European Union Emissions Trading Scheme (EU ETS) and the Clean Development Mechanism (CDM), this book demonstrates how to use a variety of econometric techniques to analyze the evolving and expanding carbon markets sphere, techniques that can be extrapolated to the worldwide marketplace. It features stylized facts about carbon markets from an economics perspective, as well as covering key aspects of pricing strategies, risk and portfolio management.

Download or read book A Whole economy Carbon Price for Europe and how to Get There written by Ottmar Edenhofer and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The European Union's plan for climate neutrality by 2050 reopens the question of the role carbon pricing can and should play. Carbon pricing should not - and ultimately cannot - only be an enforcement tool or backstop that ensures targets are met, while the heavy-lifting of decarbonisation comes from directed technological change policies. Instead, a technologyneutral carbon price must become the main element, providing signals for decarbonised operations, investment and innovation in all sectors. This would guarantee cost-effective emission cuts, provide a clear path to net-zero and is a requirement for international cooperation and a global carbon pricing regime. Carbon pricing must therefore be at the core of EU climate policy. However, introducing a uniform, credible and durable carbon price across all sectors right away is politically and institutionally challenging. Moreover, policies to address other market failures will continue to affect significantly the impact of carbon pricing. The role of carbon pricing should therefore be strengthened gradually, taking these considerations into account. Current climate policies should thus be further developed within a three-part framework. First, a separate emissions trading scheme should be introduced for the transport and heating sector to prepare the sectors for integration into the EU emissions trading system, and to manage distributional implications. A carbon price balancer would manage price differences between the two systems in the short term. Second, a carbon price stabiliser (a price floor and price ceiling) should be implemented for both systems to manage price expectations and ensure price convergence between the two systems in the long run. Third, complementary policies (carbon price amplifiers) should be strengthened or put in place to trigger investment and innovation, helping policymakers to commit credibly to enforcing the cap and addressing other market failures. This approach would ensure convergence on a uniform, credible and durable carbon price for the whole economy.

Download or read book The Distributional Implications of the Impact of Fuel Price Increases on Inflation written by Mr. Kangni R Kpodar and published by International Monetary Fund. This book was released on 2021-11-12 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.

Download or read book Carbon Taxation and Inflation written by Maximilian Konradt and published by . This book was released on 2021 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: What is the effect of climate policies on inflation and economic activity? Answering this question is critical for central banks trying to achieve price stability. This paper studies the experience from existing Co2 taxes in Canada and Europe, introduced over the last 30 years. Based on two separate empirical approaches, we find that carbon taxes do not have to be inflationary and may even have deflationary effects. In particular, our evidence suggests that the increase in energy prices was more than offset by a fall in the prices of services and other non-tradables. Our results are robust for Europe and Canada, as well as a number of different country groupings. At least in case of British Columbia, a contraction in household incomes and expenditures, in particular among the richer households, could explain the deflationary effect.

Download or read book False Alarm written by Bjorn Lomborg and published by Basic Books. This book was released on 2020-07-14 with total page 347 pages. Available in PDF, EPUB and Kindle. Book excerpt: An “essential” (Times UK) and “meticulously researched” (Forbes) book by “the skeptical environmentalist” argues that panic over climate change is causing more harm than good Hurricanes batter our coasts. Wildfires rage across the American West. Glaciers collapse in the Artic. Politicians, activists, and the media espouse a common message: climate change is destroying the planet, and we must take drastic action immediately to stop it. Children panic about their future, and adults wonder if it is even ethical to bring new life into the world. Enough, argues bestselling author Bjorn Lomborg. Climate change is real, but it's not the apocalyptic threat that we've been told it is. Projections of Earth's imminent demise are based on bad science and even worse economics. In panic, world leaders have committed to wildly expensive but largely ineffective policies that hamper growth and crowd out more pressing investments in human capital, from immunization to education. False Alarm will convince you that everything you think about climate change is wrong -- and points the way toward making the world a vastly better, if slightly warmer, place for us all.

Download or read book Macroeconomic and Financial Policies for Climate Change Mitigation A Review of the Literature written by Signe Krogstrup and published by International Monetary Fund. This book was released on 2019-09-04 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Climate change is one of the greatest challenges of this century. Mitigation requires a large-scale transition to a low-carbon economy. This paper provides an overview of the rapidly growing literature on the role of macroeconomic and financial policy tools in enabling this transition. The literature provides a menu of policy tools for mitigation. A key conclusion is that fiscal tools are first in line and central, but can and may need to be complemented by financial and monetary policy instruments. Some tools and policies raise unanswered questions about policy tool assignment and mandates, which we describe. The literature is scarce, however, on the most effective policy mix and the role of mitigation tools and goals in the overall policy framework.

Download or read book A European Carbon Border Tax written by Georg Zachmann and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The European Green Deal has set a target of reducing European Union carbon emissions by about 40 percent over the next ten years. Reaching this target is likely to involve a significant increase in carbon prices. Theoretically, higher carbon prices can lead to carbon leakage, or the relocation of industrial activity and its accompanying emissions out of economies with high carbon prices and into economies with low carbon prices. To address this perceived threat, the European Commission will consider the inclusion of a carbon border adjustment mechanism within the European Green Deal. This will apply a charge on goods imported into the EU, based on the emissions emitted during their production. The European Commission should not make the implementation of a carbon border adjustment mechanism into a must-have element of its climate policy. There is little in the way of strong empirical evidence that would justify a carbon-adjustment measure. Assessments of current carbon pricing schemes typically find no leakage, while ex-ante modelling tends to find limited leakage, with results highly sensitive to underlying assumptions. Energy price differentials - a proxy for carbon prices do not necessarily result in a relocation of energy-intensive production. Furthermore, significant logistical, legal and political challenges will arise during the design of a carbon border mechanism. Choices would have to be made between more efficient but highly complex and politically risky approaches, and mainly symbolic but more easily implementable solutions. To simplify the design of a carbon border mechanism whilst maximising its benefits, the Commission has proposed focusing only on carbon-intensive and trade-exposed sectors. But it will be difficult to draw a strict line between covered and non-covered sectors. Trade deviation will potentially lead to lobbying and the temptation for "cascading protectionism", with tariffs extended to industries further along value chains. A strategy of tying future climate policy to the implementation of a border adjustment mechanism might therefore hinder rather than help EU climate policy. The EU should instead focus upon the implementation of measures to trigger the development of a competitive low-carbon industry in Europe.

Download or read book The Citizen s Guide to Climate Success written by Mark Jaccard and published by Cambridge University Press. This book was released on 2020-02-06 with total page 307 pages. Available in PDF, EPUB and Kindle. Book excerpt: Shows readers how we can all help solve the climate crisis by focusing on a few key, achievable actions.

Download or read book The European Dimension of Germany s Energy Transition written by Erik Gawel and published by Springer. This book was released on 2019-02-07 with total page 559 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book addresses the interactions between Germany’s energy transition and the EU’s energy policy framework. It seeks to analyze the manifold connections between the prospects of the proclaimed “Energy Union” and the future of Germany’s energy transition, and identifies relevant lessons for the transformation at the EU level that can be learned from the case of Germany, as a first-mover of transforming energy systems towards renewables. The various repercussions (political, economic and systemic) from the national transition are explored within the EU context as it responds to the German transition, taking into account both existing frictions and potential synergies between predominantly national sustainability policies and the EU’s push towards harmonized policies within a common market. The book’s overall aim is to identify the most critical issues, in order to avoid pitfalls and capitalize on opportunities.

Download or read book Carbon Pricing What Role for Border Carbon Adjustments written by Ian W.H. Parry and published by International Monetary Fund. This book was released on 2021-09-27 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Climate Note discusses the rationale, design, and impacts of border carbon adjustments (BCAs), charges on embodied carbon in imports potentially matched by rebates for embodied carbon in exports. Large disparities in carbon pricing between countries is raising concerns about competitiveness and emissions leakage, and BCAs are a potentially effective instrument for addressing such concerns. Design details are critical, however. For example, limiting coverage of the BCA to energy-intensive, trade-exposed industries facilitates administration, and initially benchmarking BCAs on domestic emissions intensities would help ease the transition for emissions-intensive trading partners. It is also important to consider how to apply BCAs across countries with different approaches to emissions mitigation. BCAs are challenging because they pose legal risks and may be at odds with the differentiated responsibilities of developing countries. Furthermore, BCAs provide only modest incentives for other large emitting countries to scale carbon pricing—an international carbon price floor would be far more effective in this regard.

Download or read book International Macroeconomics written by Emmanuel Pikoulakis and published by . This book was released on 1995 with total page 271 pages. Available in PDF, EPUB and Kindle. Book excerpt: This text provides an international treatment of the asset approach to the exchange rate and the current account of the balance of payments. It includes an analysis of macroeceonomic adjustments under fixed, floating and managed exchange rates and it compares the stabilization properties of each exchange rate regime in the case where economies are subjected to random shocks and price adjustments and are characterized by inertia. It also highlights the issues that arise from international co-ordination of policies and provides an examination of the empirical evidence on exchange rate economics.