Carbon leakage and the future of Old Industrial Regions after Copenhagen

CO2 prices will continue to differ from one country to another for a long time, even if a global post-Kyoto agreement is achieved in the near future. The non-homogeneous nature of climate policies may decrease the competitiveness of some industries with the risk of relocation of activities due to carbon leakage. One of most exposed industries in Europe is iron and steel, as it is highly CO2-intensive and relatively open to international trade. Most studies estimate a leakage of up to 20% as a consequence of all the industrial production activities that are expected to be relocated, and a level of relocation ranging from 1.5% to 35% specifically for the iron and steel sector. This might seem a relatively small macroeconomic impact if measured at country or EU level. However, the picture may be quite different if the analysis is conducted at sub-national level. Therefore, one could argue that there is an important gap in the literature as the relevant studies are applied to a large geographical scale when the fact is that in Europe this industry is highly concentrated in certain specific regions, i.e. the so-called Old Industrial Regions (OIR). This paper seeks to analyse the impact that different levels of relocation of the iron and steel industry in the OIRs will have as a consequence of climate policy. This is done using an AGE (Applied General Equilibrium) model. The results show that although these effects may be diluted from a national perspective, the impact for incumbent regions may be very large, and may in fact significantly reduce their GDPs. Another important outcome emerges when the costs of CO2 reduction derived from industry relocation and from cost-effective policies are compared. Although relocation of industrial activity (i.e. forced output change) can reduce CO2, the cost is very high compared with other options (e.g. induced input substitution). These results can help national and regional policy makers understand the necessary linkages between their environmental and industrial policies.Climate Policy, Regional Economics 

International trade and the distribution of economy-wide benefits from the disbursement of climate finance

In the framework of recent international climate negotiations, industrialized countries have committed to transfer at least USD 100 billion per year to developing countries from 2020. Climate finance has become the subject of an already extensive literature. However, the economic impact of the disbursement of climate finance and the role of international trade in its distribution globally have not been studied yet. This paper specifically estimates the geographical distribution of economic benefits for 17 mitigation and 9 adaptation options. We use a Global Multi-Regional Input-Output framework to track both domestic as well as spill-over effects of climate finance disbursements. The relevance of spill-overs is confirmed: on average, 29% of the economic benefits of climate actions flow to countries different from the recipient country (i.e. to the donors and third countries). But this percentage varies widely, between 11 and 61% depending on the type of climate action implemented as well as the recipient country. The findings are expected to be of interest for both recipient and donor countries as they provide guidance on how to maximize the economic co-benefits of climate finance. (c) 2018, (c) 2018 Informa UK Limited, trading as Taylor and Francis Group.Maria Victoria Roman was funded by Norges Forskningsrd (CICEP (Strategic Challenges in International Climate and Energy Policy)). Authors also thank financial support from the Ministerio de Economía y Competitividad (ECO2015-68023) and the Eusko Jaurlaritza (IT-799-13)

La evolución de la intensidad energética de la industria vasca entre 1982 y 2001: Un análisis de descomposición

[EN] In this article an index decomposition methodology is used to estimate the effect of intersectoral and intrasectoral changes in explaining the 38% reduction in industrial energy intensity in the Basque Autonomous Community from 1982 to 2001. Period-wise additive decomposition results show that 1) the decline is mainly explained by intrasectoral changes and that 2) intersectoral changes have hardly contributed to reduce the energy intensity of the Basque industrial sector. However, time-series decomposition analysis shows that 1) four different phases can be distinguished in the evolution of energy intensity of the Basque industry from 1982 to 2001 and 2) that the evolution of the «Iron and Steel» sector is determinant when explaining those phases. Moreover, the analysis stresses the necessity to disaggregate the «Iron and Steel» sector in order to be able to distinguish purely technological effects from the rest of intrasectoral changes.[ES] En este artículo se utiliza una metodología de descomposición basada en índices para obtener estimaciones cuantificadas de los efectos intersectoriales e intrasectoriales que explican la reducción en un 38% de la intensidad energética de la industria vasca entre 1982 y 2001. Los resultados de la descomposición aditiva de los cambios de la intensidad energética de la industria vasca a nivel de período muestran: 1) que dicha reducción se debió principalmente a cambios intrasectoriales, y 2) que los cambios intersectoriales apenas contribuyeron a reducir la intensidad energética de la industria vasca. No obstante, los resultados de descomposición de serie temporal revelan: 1) que la evolución de la intensidad energética de la industria vasca no fue lineal, sino que experimentó cuatro fases perfectamente diferenciadas, y 2) que la evolución del sector «siderurgia y fundición» es determinante a la hora de explicar dichas fases. Además, se destaca la necesidad de desagregar el sector «siderurgia y fundición», lo cual permitiría distinguir los cambios puramente tecnológicos del resto de los cambios intrasectoriales.Ansuategi, A.; Arto, I. (2004). The evolution of the energy intensity of the basque industry from 1982 to 2001: A decomposition analysis. Economía Agraria y Recursos Naturales - Agricultural and Resource Economics. 4(7):63-91. doi:10.7201/earn.2004.07.04SWORD63914

Returns to Scale and Technical Efficiency in Colombian Coffee Production: Implications for Colombia’s Agricultural and Land Policies

This paper applies a parametric approach to estimate technical and scale (in)efficiencies using input and output data at the level of 850 individual Colombian coffee-farms. Different Stochastic Production Frontier functions are estimated using a two- step procedure that corrects the endogeneity that has been ignored in previous works, leading to more reliable (i.e. unbiased and consistent) results. We conclude that small and medium coffee farmers are technically inefficient and exhibit increasing returns to scale, whereas large coffee farmers are close to being quasi-technically efficient and exhibit decreasing returns to scale. The corrected-for-endogeneity estimation also indicates that small and medium-sized units must prioritise primarily the land factor, whereas large farms should concentrate their efforts on increasing the labour factor. Based on these results, several agricultural and land policy recommendations are made

Economic Growth and Transboundary Pollution in Europe: An Empirical Analysis

The existing empirical evidence suggests that environmental Kuznets curvesonly exist for pollutants with semi-local and medium term impacts.Ansuategi and Perrings (2000) have considered the behavioral basis for thecorrelation observed between different spatial incidence of environmentaldegradation and the relation between economic growth and environmentalquality. They show that self-interested planners following a Nash-typestrategy tend to address environmental effects sequentially: addressingthose with the most immediate costs first, and those whose costs aredisplaced in space later. This paper tests such behavioral basis in thecontext of sulphur dioxide emissions in Europe. Copyright Kluwer Academic Publishers 2003economic growth, Kuznets, panel data, sulphur oxides, transboundary externalities,

Sustainability, growth and development

Abstract The Brundtland Report (WCED, 1987) encouraged the view that the main threats to the environmental sustainability of development are poverty-driven depletion of environmental resources in the developing world, and consumption-driven pollution of the biosphere by the developed world. Recent work on the empirical relationship between per capita GDP growth and certain indicators of environmental quality seems to contradict this view. Some indicators of local air and water quality first worsen and then improve as per capita incomes rise. This paper reconsiders both these findings, and the empirical relation between environmental quality and measures of poverty, consumption and human development. It finds that deepening poverty at one end of the scale and increasing affluence at the other both have implications for the environment