Addressing leakage in the EU ETS : Border adjustment or output-based allocation ?.

The EU ETS has been criticised for threatening the competitiveness of European industry and generating carbon leakage, i.e., increasing foreign greenhouse gas emissions. Two main options have been put forward to tackle these concerns : border adjustments and output-based allocation, i.e., allocation of free allowances in proportion to current production. We compare various configurations of these two options, as well as a scenario with full auctioning and no border adjustment. Against this background, we develop a model of the main sectors covered by the EU ETS: electricity, steel, cement, and aluminium. We conclude that the most efficient way to tackle leakage is auctioning with border adjustment, which generally induces a negative leakage (a spillover). This holds even if the border adjustment does not include indirect emissions, if it is based on EU (rather than foreign) specific emissions, or (for some values of the parameters) if it covers only imports. Another relatively efficient policy is to combine auctioning in the electricity sector and output-based allocation in exposed industries, especially if free allowances are given both for direct and indirect emissions, i.e., those generated by the generation of the electricity consumed. Although output-based allocation is generally less effective than border adjustment to tackle leakage, it is more effective to mitigate production losses in the sectors affected by the ETS, which may ease climate policy adoption.Emission trading; border adjustment; output‐based allocation; competitiveness; carbon leakage;

How to design a border adjustment for the European Union Emissions Trading System ?.

Border adjustments are currently discussed to limit the possible adverse impact of climate policies on competitiveness and carbon leakage. We discuss the main choices that will have to be made if the European Union implements such a system alongside the EU ETS. Although more analysis is required on some issues, on others some design options seem clearly preferable to others. First, the import adjustment should be a requirement to surrender allowances rather than a tax. Second, the general rule to determine the amount of allowances per ton imported should be the product-specific benchmarks that the European Commission is currently elaborating for a different purpose (i.e. to determine the amount of free allowances). Third, this obligation should apply when the imported product is registered at the EU border, and not after the end of the year as is the case for domestic emitters. Fourth, the export adjustment should take the form of a rebate on the amount of allowances a domestic emitter has to surrender. Five, this rebate should equal the above-mentioned product-specific benchmarks, not the emissions of the particular exporting plant or firm. Finally, the adjustment does not have to apply to consumer products but mostly to basic products.Carbon leakage; border adjustment; border tax adjustment; EU ETS; competitiveness;

How to Design a Border Adjustment for the European Union Emissions Trading System?

Border adjustments are currently discussed to limit the possible adverse impact of climate policies on competitiveness and carbon leakage. We discuss the main choices that will have to be made if the European Union implements such a system alongside with the EU ETS. Although more analysis is required on some issues, on others some design options seem clearly preferable to others. First, the import adjustment should be a requirement to surrender allowances rather than a tax. Second, the general rule to determine the amount of allowances per ton imported should be the product-specific benchmarks that the European Commission is currently elaborating for a different purpose (i.e. to determine the amount of free allowances). Third, this obligation should apply when the exported product is registered at the EU border, and not after the end of the year as is the case for domestic emitters. Fourth, the export adjustment should take the form of a rebate on the amount of allowances a domestic emitter has to surrender. Five, this rebate should equal the above-mentioned product-specific benchmarks, not the emissions of the particular exporting plant or firm. Finally, the adjustment does not have to apply to consumer products but mostly to basic products.Carbon Leakage, Border Adjustment, Border Tax Adjustment, EU ETS, Competitiveness

Creative Destruction and Innovative Core: Is Innovation Persistent at the Firm Level? An empirical reexamination from CIS data comparing the propensity score and regression methods

At the macroeconomic level, the persistence of innovation allows sustainable growth. But does growth come from the same set of firms or originate always from different innovators? On this point, the assumptions of endogenous growth models differ and innovation persistence at the macroeconomic level can be supported by different firm-level behavioural assumptions. The aim of this article is twofold. First, we evaluate the empirical pertinence of the different views of the dynamics of the innovative process by estimating the degree of innovation persistence at the firm level. Secondly, we explore the determinants of innovation persistence by testing the empirical implications of three theoretical models. We show that the innovation persistence is essential at the firm level and that the origin of the persistence depends on the size of the firm.

Addressing leakage in the EU ETS : Border adjustment or output-based allocation ?

The EU ETS has been criticised for threatening the competitiveness of European industry and generating carbon leakage, i.e. increasing foreign greenhouse gas emissions. Two main options have been put forward to tackle these concerns : border adjustments and output-based allocation, i.e. allocation of free allowances in proportion to current production. We compare various configurations of these two options, as well as a scenario with full auctioning and no border adjustment. Against this background, we develop a model of the main sectors covered by the EU ETS : electricity, steel, cement and aluminium. We conclude that the most efficient way to tackle leakage is auctioning with border adjustment, which generally induces a negative leakage (a spillover). Another relatively efficient policy is to combine auctioning in the electricity sector and output-based allocation in exposed industries, especially if free allowances are given both for direct and indirect emissions, i.e. those generated by the generation of the electricity consumed. Although output-based allocation is generally less effective than border adjustment to tackle leakage, it is more effective to mitigate production losses in the sectors affected by the ETS.Le système européen d'échange de quotas d'émission de gaz à effet de serre (GES) a été critiqué comme menaçant la compétitivité de l'industrie européenne et comme générant des fuites de carbone, c'est-à-dire une augmentation des émissions de GES à l'étranger. Principalement, deux options ont été avancées pour traiter ces problèmes : l'ajustement aux frontières et l'allocation basée sur la production, c'est-à-dire une allocation gratuite de permis proportionnelle à la production courante. Nous développons un modèle représentant les principaux secteurs inclus dans le système européen de quotas (électricité, acier, ciment et aluminium) et analysons plusieurs configurations de chacune de ces options, ainsi qu'un scénario avec enchères et sans ajustement aux frontières. Nous trouvons qu'une allocation par l'intermédiaire d'enchères, complétée par un ajustement aux frontières, permet de limiter le plus les fuites de carbone, voire de diminuer les émissions dans les pays hors UE27 (fuites négatives). Une autre politique relativement efficace est de combiner des enchères pour le secteur de l'électricité et une allocation basée sur la production pour les secteurs exposés aux fuites de carbone, en particulier si la quantité de permis distribuée tient compte des émissions directes et indirectes (liées à la génération de l'électricité consommée). Bien que cette dernière option soit généralement moins efficace qu'un ajustement aux frontières pour limiter les fuites de carbone, elle permet néanmoins de réduire les pertes de production dans les secteurs exposés à la concurrence internationale

Time to act now? Assessing the costs of delaying climate measures and benefits of early action

This paper compares the results of the three state of the art climate-energy-economy models IMACLIM-R, ReMIND-R, and WITCH to assess the costs of climate change mitigation in scenarios in which the implementation of a global climate agreement is delayed or major emitters decide to participate in the agreement at a later stage only. We find that for stabilizing atmospheric GHG concentrations at 450 ppm CO2-only, postponing a global agreement to 2020 raises global mitigation costs by at least about half and a delay to 2030 renders ambitious climate targets infeasible to achieve. In the standard policy scenario—in which allocation of emission permits is aimed at equal per-capita levels in the year 2050—regions with above average emissions (such as the EU and the US alongside the rest of Annex-I countries) incur lower mitigation costs by taking early action, even if mitigation efforts in the rest of the world experience a delay. However, regions with low per-capita emissions which are net exporters of emission permits (such as India) can possibly benefit from higher future carbon prices resulting from a delay. We illustrate the economic mechanism behind these observations and analyze how (1) lock-in of carbon intensive infrastructure, (2) differences in global carbon prices, and (3) changes in reduction commitments resulting from delayed action influence mitigation costs.ou

Creative destruction and the innovative core: is innovation persistent at the firm level?

Responses to changes in marginal income tax rates can be more complex than a simple adjustment in hours worked. Given this, a more inclusive way to assess the deadweight costs of taxes on labour income is to examine the effect of changes in the marginal tax rate on taxable income rather than on labour supply. In this paper we apply a grouping estimator to data from the UK Survey of Personal Incomes so assess the magnitude of taxable income responses of the self employed. Our results point to a modest degree of deadweight loss

Hybridization effect on mechanical properties of composite laminates

Composite materials are increasingly being used in the aeronautical industry. Although carbon fibers are the strongest and most used in the aeronautical sector, these fibers collapse quite suddenly due to their fragile nature leading to catastrophic damage. In order to minimize this effect, an alternative technique is used, which consists of combining these fibers with another less fragile type, such as Kevlar fiber, in order to obtain a material with a more ductile behavior. As the viscoelastic behavior is not much discussed in the available open literature, this work intends to study this mechanical property in several hybrid composites involving carbon, kevlar and glass fibers. For a better understanding of this phenomenon, the static behavior and tenacity of these materials were also studied. For this purpose, the effect of hybridization on flexural properties, interlaminar shear strength, creep and stress relaxation was studied in eighteen hybrid combinations combined with an epoxy matrix. It was observed that hybridization can create a more tenacious and balanced composite. The stacking sequence has a significant influence on the mechanical properties of laminates. As such, for all mechanical tests, carbon fibers are better in compression if hybridized with kevlar and better in tension if hybridized with glass. Glass fibers have always performed better under compression and kevlar fibers always perform better under tension, regardless of which other fiber they are hybridized to. With these positions in the laminate, the composites achieve greater tension and stiffness, but less deformation, greater interlaminar shear strength, less creep and less stress relaxation. As for the number of fiber layers, in the bending properties, a lower percentage of kevlar in the laminate results in higher bending stress and interlaminar shear strength. However, for the viscoelastic behavior of hybrid composites, the number of layers has no direct influence on the creep and stress relaxation values, since molecular rearrangements occur. In addition, a study of the bending properties for different strain rates in carbon fiber composites and fiberglass composites was carried out. In this way, it could be shown that there is a relationship between the strain rate and the flexural stress and stiffness of the composites. As the strain rate increases, there is an increase in bending stress and stiffness.Os materiais compósitos estão cada vez mais a ser utilizados na indústria aeronáutica. Apesar das fibras de carbono serem as mais resistentes e as mais usadas no setor aeronáutico, estas fibras colapsam de maneira bastante repentina devido a sua natureza frágil levando a danos catastróficos. Com o intuito de minimizar este efeito utiliza­se uma técnica alternativa que consiste em combinar estas fibras com outro tipo menos frágil, como por exemplo a fibra de kevlar, de modo a obterem material com um comportamento mais dúctil. Como o comportamento viscoelástico não é muito abordado na literatura aberta disponível, este trabalho pretende então estudar esta propriedade mecânica em vários compósitos híbridos envolvendo fibras de carbono, kevlar e vidro. Para o melhor entendimento deste fenómeno estudou­se igualmente o comportamento estático e tenacidade destes materiais. Para este propósito, o efeito da hibridização nas propriedades de flexão, resistência ao cisalhamento interlaminar, fluência e relaxamento de tensões foi estudado em dezoito combinações hibridas combinadas com uma matriz epoxídica. Observou­se que a hibridização pode criar um compósito mais tenaz e balanceado. A sequência de empilhamento tem uma influência significativa nas propriedades mecânicas dos laminados. Como tal, para todos os testes mecânicos, as fibras de carbono são melhores na compressão se hibridizadas com kevlar e melhores em tensão se hibridizadas com vidro. As fibras de vidro sempre apresentaram melhores resultados sob compressão e as fibras de kevlar sempre apresentam melhores resultados sob tensão, independentemente da outra fibra com a qual são hibridizadas. Com essas posições no laminado, os compósitos alcançam maior tensão e rigidez, mas menor deformação, maior resistência ao cisalhamento interlaminar, menor fluência e menor relaxamento de tensão. Quanto ao número de camadas de fibras, nas propriedades de flexão, uma menor percentagem de kevlar no laminado resulta em maior tensão de flexão e resistência ao cisalhamento interlaminar. Porém, para o comportamento viscoelástico dos compósitos híbridos, o número de camadas não tem influência direta nos valores de fluência e relaxamento de tensão, uma vez que ocorrem rearranjos moleculares. Além disso, foi feito um estudo das propriedades de flexão para diferentes taxas de deformação em compósitos de fibra de carbono e compósitos de fibra de vidro. Desta forma, pôde­se mostrar que existe uma relação entre a taxa de deformação e a tensão de flexão e rigidez dos compósitos. Com o aumento da taxa de deformação, ocorre um aumento da tensão de flexão e da rigidez

Admissibility of Localizations of Crossed Modules

The correspondence between the concept of conditional flatness and admissibility in the sense of Galois appears in the context of localization functors in any semi-abelian category admitting a fiberwise localization. It is then natural to wonder what happens in the category of crossed modules where fiberwise localization is not always available. In this article, we establish an equivalence between conditional flatness and admissibility in the sense of Galois (for the class of regular epimorphisms) for regular-epi localization functors. We use this equivalence to prove that nullification functors are admissible for the class of regular epimorphisms, even if the kernels of their localization morphisms are not acyclic.Comment: 22 page

Pourra-t-on limiter la hausse de la température à +2°C ?.

Groupe Intergouvernemental d’experts sur l’Evolution du Climat (GIEC); Réchauffement Climatique;