CO2 Emissions and Greenhouse Gas Policy Stringency - An Empirical Assessment

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This paper investigates how greenhouse gas (GHG) policy stringency affects anthropogenic CO2 emissions using a new GHG policy stringency indicator and a structural spatial VAR approach. We estimate an average country-specific elasticity of CO2 emissions to GHG policy stringency, and assess the role of channels over which policy stringency affects CO2 emissions. We then ascertain how GHG policy stringency affects sectoral CO2 efficiency and the sectoral composition of economies. Results indicate that a country with no GHG regulations can achieve a 15% reduction of its CO2 emissions by adopting the stringency level of the most regulated country. In addition, increasing GHG policy stringency improves sectoral CO2 efficiency, and decreases production in CO2 intensive sectors thereby altering the sectoral composition. At last, policy induced CO2 reduction costs in terms of GDP are relatively large, but 4 times lower for developing compared to developed countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IRENE Working Paper ; No. 15-03

Classification and Topics

• Classification: Wirtschaft ; Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products ; Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling ; Climate; Natural Disasters and Their Management; Global Warming ; Environmental Economics: Government Policy
• Subject: CO2 ; composition effect ; environmental policy stringency ; greenhouse gas emissions ; impluse reponse functions ; spatial VAR ; technique effect

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Probst, Marcel ; Sauter, Caspar
• Event: Veröffentlichung
• (who): University of Neuchâtel, Institute of Economic Research (IRENE)
• (where): Neuchâtel
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/191474
• Last update: 10.03.2025, 11:45 AM CET