Essays on the Role of Emerging Economies in International Climate Policy

Emerging economies like China and India have contributed a large share in the recent growth in global CO2 emissions, yet these countries are at a different level of economic development than industrialized countries. This dissertation asks the question of how emerging economies can contribute to international climate policies by analyzing existing and proposed policy measures. For the long run, an international regime is necessary to avoid dangerous climate change. After reviewing the literature on how different regimes would affect China and India, the impacts of one particular regime are analyzed numerically in a computable general equilibrium (CGE) model with respect to their consequences on China and India. For India, effects of the proposed policy on different household types are discussed. Furthermore, the impact of uncertainty in key abatement technologies is taken into account. For the medium run, unilateral climate policy might prevail and border carbon adjustments are proposed in order to avoid loss of competitiveness and carbon leakage. Incentives for setting certain carbon tariff rates are studied and the uncertainty in measuring emissions embodied in trade is shown, taking China as an example. Finally, a current policy measure is discussed. Taking a closer look at China, the determinants for technology transfer in the Clean Development Mechanism are analyzed.Schwellenländer wir China und Indien haben zuletzt einen Großteil des globalen Wachstums der CO2-Emission beigetragen - diese Länder sind jedoch auf einem anderen ökonomischen Entwicklungsstand als Industrieländer Diese Dissertation setzt sich mit der Frage auseinander, wie Schwellenländer zu internationaler Klimapolitik beitragen können und analysiert existierende und vorgeschlagene Politikmaßnahmen. In der langen Frist ist ein internationales Klimaregime unabdingbar, um gefährlichen Klimawandel zu vermeiden. Eine Literaturübersicht gibt zunächst Aufschluss darüber, wie verschiedene solcher Regime China und Indien beeinflussen würden, bevor die Auswirkungen eines Regimes auf China und Indien genauer in einem berechenbaren allgemeinen Gleichgewichtsmodell betrachtet werden. Für Indien werden dabei die Effekte auf verschiedene Haushaltstypen diskutiert. Zudem werden die Auswirkungen von Unsicherheiten in Schlüsseltechnologien zur CO2-Vermeidung untersucht. Mittelfristig ist jedoch keine globale Klimapolitik zu erwarten. Sich möglicherweise daraus ergebene Wettbewerbsnachteile oder Verlagerung von Emissionen konnten "Klimazölle" entgegenwirken. Die Anreize, bestimmte Zollsätze zu verwenden, werden untersucht und die Unsicherheiten der Messung von impliziten grenzüberschreitenden CO2-Flüssen am Beispiel Chinas diskutiert. Abschließend wird eine existierende Politikmaßnahme untersucht. Dabei werden die Determinanten für Technologietransfer in Projekten des Clean Development Mechanism in China bestimmt

Effects of international climate policy for India: Evidence from a national and global CGE model

In order to reach the two degree target it is necessary to control CO2 emissions also in fast growing emerging economies such as India. The question is how the Indian economy would be affected by e.g. including the country into an international climate regime. Existing analyses with either a global model or a single country computable general equilibrium model miss important aspects such as distributional issues or international repercussions. By soft-linking models of these two classes, we provide a more detailed view on these issues. In particular, we analyze different options of transferring revenues from domestic carbon taxes and international transfers to different household types and how different assumptions on exchange rates affect transfer payments. We also show effects stemming from international price repercussions. Our analysis focusses on how these transmission channels affect welfare of nine different household types

A GAMS/MPSGE implementation of the PET model

This paper describes a version of the Population-Economy-Technology (PET) model implemented in the GAMS/MPSGE programming language. The implementation of the model is comparable with the original fortran version of iPETS over a number of test cases. While a number of possible configurations exist for both model types, we demonstrate that there is a configuration that makes both implementations behave very similarly and the remaining difference can be traced to different implementations of dynamic agent behavior. This paper also serves as a methodological blueprint for model translation across different programming languages

Distributional impacts of reaching ambitious near-term climate targets across households with heterogeneous consumption patterns: A quantitative macro-micro assessment for the 2030 Climate Target Plan of the EU Green Deal

This report enriches economy-wide modelling with household-level microdata to assess the distributional impacts of climate policy in the broader context of the EU Green Deal. The first part of the report provides a detailed exploration of the EU Household Budget Survey data in the light of its use in analysing climate policy impacts across households with heterogeneous consumption patterns. The second part of the report describes the macro-micro framework to combine the Household Budget Survey with the JRC-GEM-E3 model. The third part studies scenarios that cover three different policy configurations – ranging from a regulation-based to a pricing-based approach – all of which reach a reduction in greenhouse gas emissions of 55% in 2030 relative to 1990. Results provide insights into the potential distributional implications across EU households of an upward revision of the 2030 targets, a key aspect in achieving a Just Transition to climate neutrality. Regulation-based policies can mitigate price changes observed by households, while pricing-based policies raise revenue that have the potential to offset regressive impacts. Careful design of targeted complementary measures will therefore be required to reconcile social and environmental sustainability.JRC.C.6-Economics of Climate Change, Energy and Transpor

Waveform control of orientation-dependent ionization of DCl in few-cycle laser fields

Strong few-cycle light fields with stable electric field waveforms allow controlling electrons on time scales down to the attosecond domain. We have studied the dissociative ionization of randomly oriented DCl in 5 fs light fields at 720 nm in the tunneling regime. Momentum distributions of D+ and Cl+ fragments were recorded via velocity-map imaging. A waveformdependent anti-correlated directional emission of D+ and Cl+ fragments is observed. Comparison of our results with calculations indicates that tailoring of the light field via the carrier envelope phase permits the control over the orientation of DCl+ and in turn the directional emission of charged fragments upon the breakup of the molecular ion

Modelling consumption and constructing long-term baselines in final demand

Modelling and projecting consumption, investment and government demand by detailed commodities in CGE models poses many data and methodological challenges. We review the state of knowledge of modelling consumption of commodities (price and income elasticities and demographics), as well as the historical trends that we should be able to explain. We then discuss the current approaches taken in CGE models to project the trends in demand at various levels of commodity disaggregation. We examine the pros and cons of the various approaches to adjust parameters over time or using functions of time and suggest a research agenda to improve modelling and projection. We compare projections out to 2050 using LES, CES and AIDADS functions in the same CGE model to illustrate the size of the differences. In addition, we briefly discuss the allocation of total investment and government demand to individual commodities

Climate policy design, competitiveness and income distribution: A macro-micro assessment for 11 EU countries

Concerns about industry competitiveness and distributional impacts can deter ambitious climate policies. Typically, these issues are studied separately, without giving much attention to the interaction between the two. Here, we explore how carbon leakage reduction measures affect distributional outcomes across households within 11 European countries by combining an economy-wide computable general equilibrium model with a household-level microsimulation model. Quantitative simulations indicate that a free allocation of emission permits to safeguard the competitive position of energy-intensive trade-exposed industries leads to impacts that are slightly more regressive than under full auctioning. We identify three channels that contribute to this effect: higher capital and labour income; lower tax revenue for compensating low-income households; and stronger consumption price increases following from higher carbon prices needed to reach the same emissions target. While these findings suggest a competitiveness-equity trade-off, the results also show that redistributing the revenues from partial permit auctioning on an equal-per-household basis still ensures that climate policy is progressive, indicating that there is room for policy to reconcile competitiveness and equity concerns. Finally, we illustrate that indexing social benefits to consumer price changes mitigates pre-revenue-recycling impact regressivity, but is insufficient to compensate vulnerable households in the absence of other complementary measures

Projecting input-output tables for model baselines

This technical report describes a multi-regional generalized RAS (MR-GRAS) procedure to update/project input-output tables or social accounting matrices. The method is able to incorporate a number of constraints on row and columns sums as well as specific flows between economic sectors and specific taxes in an input-output table. This feature is particularly useful to reconcile information coming from different data sets. In the application described in this report, the method is tailored towards constraints with regard to the energy system. Specifically, we specify constraints in the updating/projecting algorithm that are able to reproduce the economic values reflected in an energy balance from an energy system model. Here, we show that the method is able to generate input-output tables that are forward projected until 2050 and can be used as a baseline in a computable general equilibrium model like JRC-GEM-E3.JRC.C.6-Economics of Climate Change, Energy and Transpor

Global Energy and Climate Outlook 2018: Sectoral mitigation options towards a low-emissions economy

This report analyses global transition pathways to a low Greenhouse Gas (GHG) emissions economy The main scenarios presented have been designed to be compatible with the 2°C and 1.5°C temperature targets put forward in the UNFCCC Paris Agreement, in order to minimise irreversible climate damages. Reaching these targets requires action from all world countries and in all economic sectors. Global net GHG emissions would have to drop to zero by around 2080 to limit temperature increase to 2°C above pre-industrial levels (by around 2065 for the 1.5°C limit). The analysis shows that this ambitious low-carbon transition can be achieved with robust economic growth, implying small mitigation costs. Results furthermore highlight that the combination of climate and air policies can contribute to improving air quality across the globe, thus enabling progress on the UN Sustainable Development Goals for climate action, clean energy and good health. Key uncertainties in future pathways related to the availability of future technological options have been assessed for Carbon Capture and Sequestration (CCS) and bioenergy. If CCS technologies would not develop, a 2°C pathway would have a similar mitigation trajectory in the first half of the century as a 1.5°C scenario with CCS.JRC.C.6-Economics of Climate Change, Energy and Transpor

Energy system developments and investments in the decisive decade for the Paris Agreement goals

The Paris Agreement does not only stipulate to limit the global average temperature increase to well below 2 °C, it also calls for 'making finance flows consistent with a pathway towards low greenhouse gas emissions'. Consequently, there is an urgent need to understand the implications of climate targets for energy systems and quantify the associated investment requirements in the coming decade. A meaningful analysis must however consider the near-term mitigation requirements to avoid the overshoot of a temperature goal. It must also include the recently observed fast technological progress in key mitigation options. Here, we use a new and unique scenario ensemble that limit peak warming by construction and that stems from seven up-to-date integrated assessment models. This allows us to study the near-term implications of different limits to peak temperature increase under a consistent and up-to-date set of assumptions. We find that ambitious immediate action allows for limiting median warming outcomes to well below 2 °C in all models. By contrast, current nationally determined contributions for 2030 would add around 0.2 °C of peak warming, leading to an unavoidable transgression of 1.5 °C in all models, and 2 °C in some. In contrast to the incremental changes as foreseen by current plans, ambitious peak warming targets require decisive emission cuts until 2030, with the most substantial contribution to decarbonization coming from the power sector. Therefore, investments into low-carbon power generation need to increase beyond current levels to meet the Paris goals, especially for solar and wind technologies and related system enhancements for electricity transmission, distribution and storage. Estimates on absolute investment levels, up-scaling of other low-carbon power generation technologies and investment shares in less ambitious scenarios vary considerably across models. In scenarios limiting peak warming to below 2 °C, while coal is phased out quickly, oil and gas are still being used significantly until 2030, albeit at lower than current levels. This requires continued investments into existing oil and gas infrastructure, but investments into new fields in such scenarios might not be needed. The results show that credible and effective policy action is essential for ensuring efficient allocation of investments aligned with medium-term climate targets