Artikel
Unilateral Phase-Out of Coal to Power in an Emissions Trading Scheme
We investigate the displacement effects of unilateral phase-out-of-coal policies in a stylized two-country model with coal- and gas-fired electricity generation in an international emissions trading scheme. In the basic policy scenario, electricity markets are national and one country bans coal while the emissions cap remains unchanged. The allocative displacement effects are strongly asymmetric: the coal-banning country suffers a welfare loss, the other country is better off, and aggregate welfare declines. Furthermore, the permit price decreases, while the electricity price rises in the unilaterally acting country and declines in the other country. If all countries would phase out coal, the effects would be symmetric and all countries would lose. We then extend the analysis to the cases (i) when the unilateral coal ban is combined with a moderate cut of the emissions cap (as recently suggested in an EU Directive) and (ii) when we allow for international trade in electricity. Compared to the basic unilateral policy, in these cases, the total welfare costs tend to be smaller and some tend to be shifted from the unilaterally acting country to the other one.
- Language
-
Englisch
- Bibliographic citation
-
Journal: Environmental and Resource Economics ; ISSN: 1573-1502 ; Volume: 80 ; Year: 2021 ; Issue: 2 ; Pages: 379-407 ; Dordrecht: Springer Netherlands
- Classification
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Wirtschaft
Taxation and Subsidies: Incidence
Nonrenewable Resources and Conservation: Issues in International Trade
Energy: Government Policy
- Subject
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Unilateral
Phase-out
Coal
Gas
Electricity
ETS
- Event
-
Geistige Schöpfung
- (who)
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Eichner, Thomas
Pethig, Rüdiger
- Event
-
Veröffentlichung
- (who)
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Springer Netherlands
- (where)
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Dordrecht
- (when)
-
2021
- DOI
-
doi:10.1007/s10640-021-00589-3
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Eichner, Thomas
- Pethig, Rüdiger
- Springer Netherlands
Time of origin
- 2021
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