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GTAP Resource #1749

"PSR emissions trading: an alternative for conventional emissions trading that would prevent carbon leakage and protect exposed sectors of industry?"
by Kuik, Onno and Reyer Gerlagh

Given potentially negative impacts of Kyoto-type climate change policies on the competitiveness of Dutch exposed sectors and the possibility of international carbon leakage, is there a possibility to do better? This paper examines the option of a relative, or rate-based emissions ceiling for exposed sectors in the Netherlands. An analysis of Performance Standard Rate (PSR) emissions trading for the Netherlands was carried out with the GTAP-E model that was extended to simulate PSR trading and variable returns to scale in production. The model simulations suggest that PSR emissions trading would reduce carbon leakage and loss of competitiveness of exposed sectors, but that it would not improve welfare. This result is sensitive to assumptions on trade elasticities and returns to scale.

Keywords: emissions trading; international competitiveness; carbon reduction policies; carbon leakage; international trade and the environment.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
2005 Conference Paper
Status: Published
By/In: Presented at the 8th Annual Conference on Global Economic Analysis, Lübeck, Germany
Date: 2005
Version: 02
Created: Kuik, O. (5/1/2005)
Updated: Batta, G. (6/21/2005)
Visits: 1,729
No keywords have been specified.

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