presented by belay fekadu, farzad taheripour, patrick georges, david mayer-foulkes, marianne aasen,...
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Presented by Belay Fekadu, Farzad Taheripour, Patrick Georges, David Mayer-Foulkes, Marianne
Aasen, Hyun-Sik Chung, Kenatro Katsumata, Christa Clapp
GTAP_E
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Presentation Outline• Annex 1 without USA
• Emissions targets
• Energy Substitution Possibilities
• Tax Replacement Implications
• Concluding Comments
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Annex 1 without USA: main resultsKyoto NT Kyoto TR USA BAD USA BAD Kyoto TR USA BAD
Utility RCTAX RCTAXUSA -36 -27 0.6 0.0 77 0EU -22 -14 -10 -0.2 77 42EEFSU 5 -27 -18 1.3 75 42JPN -32 -16 -10 -0.2 77 42RoA1 -36 -21 -15 -0.4 77 42EEx 4 3 1 -0.2 0 0CHIND 1 1 0 0.0 0 0RoW 4 4 1 0.0 0 0Leakage 7% 8% 6%
Emissions
Price of emissions decreases: cheaper hot air
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Change in CO2 Emissions by Producers
USA EU EEFSU JPN RoA1 EEx CHIND RoW TotalAgriculture 0.15 -0.8 -1.77 -0.29 -0.49 0.21 0.11 0.15 -2.73Coal 0 0 0 0 0 0 0 0 0Oil 0 0 0 0 -0.01 0 0 -0.02 -0.03Gas 0 -0.05 -0.09 -0.23 -0.01 -0.01 -0.01 -0.01 -0.39Oil_Pcts 0 -0.01 -0.02 0 -0.01 0 0 0 -0.02Electricity 1.98 -57.43 -98.66 -21.32 -20.74 2.39 1.24 4.75 -187.8En_Int_ind 2.41 -12.18 -21.91 -6.86 -6.15 1.84 2.04 1.8 -39.03Oth_ind_ser 2.77 -11.6 -11.92 -4.58 -6.7 1.61 0.8 1.36 -28.27Total 7.3 -82.07 -134.4 -33.27 -34.1 6.05 4.17 8.01 -258.3
leakage 9%
Quantity: Non-restricted countries increase emitting production a little
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Percent Change in Value of Exports by Industry
USA EU EEFSU JPN RoA1 EEx CHIND RoW TotalAgriculture 16 24 -27 0 8 29 6 16 71Coal -78 -3 -65 -1 -92 -39 -21 -43 -342Oil -10 -41 91 0 -34 -530 -24 -5 -553Gas -7 -61 -223 0 -46 -159 -1 0 -498Oil_Pcts -12 -100 -33 -3 -8 -47 -3 -25 -229Electricity 14 91 -101 0 34 19 5 113 177En_Int_ind 298 339 -527 -27 -39 192 88 267 591Oth_ind_ser 64 55 -73 1 245 421 15 -59 668Total 284 303 -957 -31 67 -114 66 264 -117
Trade: EU and non-restricted countries increase emitting production considerably
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Price Index of Domestic Purchases (Producers)
USA EU EEFSU JPN RoA1 EEx CHIND RoWAgriculture 0.3 0.4 1.9 0.4 0.3 0.2 0.3 0.3Coal 0.0 59.0 82.6 58.0 66.2 -0.8 0.1 -0.2Oil -1.1 -1.4 -2.1 -1.2 -1.3 -1.3 -1.1 -1.1Gas 0.0 18.7 21.2 19.1 26.9 -1.0 0.1 0.1Oil_Pcts -0.8 20.7 20.3 13.4 20.1 -1.1 -0.7 -0.9Electricity 0.2 6.5 25.5 3.4 6.0 -0.6 0.1 0.1En_Int_ind 0.2 1.0 4.6 1.0 1.1 0.0 0.2 0.3Oth_ind_ser 0.2 0.3 0.4 0.3 0.1 0.0 0.2 0.3Total -0.9 105.1 154.4 94.3 119.4 -4.5 -0.7 -1.0
Price: However, expected price differences small in non-constrained countries
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Annex 1 without USA but “good” US behaviour
• USA out of Annex 1 for political reasons
• but USA wants to do something independently
– Self-imposed emission reduction: -36%
• Example: “California does more to reduce CO2 emissions than many Annex 1-countries”
• What to expect? – Cost of this political decision for USA:– it deprives itself from the benefit of trading permits
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Countries Emissions Good behaviour
Emissions Trading, USA in
Quota
USA -35.6 -26.28 -35.6 EU -9.21 -14.25 -22.4 EEFSU -19.24 -26.62 12.87 JPN -10.19 -15.53 -31.8 RoA1 -13.79 -20.96 -35.7 EEx 2.68 2.74 2.68 CHIND 1.05 1.09 1.05 RoW 3.31 3.61 3.31
•When US is out of Annex 1 but behaves nicely: it fulfills its own quota
US must reduce emission by more than if it was in Annex 1
•“Rest of Annex 1” has a less ambitious target (same excess supply of permits; less excess demand overall quota target for Annex 1 is easier to achieve.
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Large increase in carbon tax in the US/ lower increase in rest of Annex 1
Small decrease in US private household welfare (really small---why)
Decrease in welfare in Russia: permits have less values when USA is out of Annex 1
Countries Carbon Tax Good behaviour
Carbon tax Trading, USA in
UP --Welfare Good behaviour
UP --Welfare Trading, USA in
USA 123.51 76.52 -0.39 -0.36 EU 47.98 76.57 -0.1 -0.31 EEFSU 47.54 75.1 1.04 2.23 JPN 47.97 76.63 -0.14 -0.29 RoA1 48.07 76.77 -0.74 -0.95 EEx 0 0 -0.74 -0.7 CHIND 0 0 0.12 0.09 RoW 0 0 0.18 0.16
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Market price of energy in USA
USA out of Annex 1, good behavior
USA in Annex 1, Trading permits
USA out of Annex 1, bad behavior
Agriculture 1.26 1.1 0.3 Coal -8.21 -5.89 0.01 Oil -6.61 -5.51 -1.06
Gas -1.06 -1.06 0.01 Oil_Pcts -4.21 -3.63 -0.77
Electricity 26.87 18.04 0.16 En_Int_ind 3.89 2.66 0.21
Oth_ind_ser 0.87 0.66 0.22
Market price of Coal, Oil and Gas tends to fall as we go from bad to good behavior
Market price of electricity tends to increase
Substitution out of coal, oil and gas and into electricity
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Emissions targets
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Energy Substitution Possibilities
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Tax Replacement Implications
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Concluding Comments