Net national emissions, CO2 taxation and the role of forestry

The concept of net national emissions suggests that accumulation of carbon in forestry should be taken into account when countries buy CO₂ permits or pay CO₂ taxes. The paper analyses the question of the correct tax/subsidy programme for giving proper incentives to forest owners and utilizers of wood. The analysis uses a dynamic general equilibrium model with productive capital and the stock of forests as state variables. It turns out that in a decentralized economy forest owners should be subsidized and CO₂ emissions should be taxed independently of whether they originates from wood or fossil fuels.     

Decomposition of energy-related CO2 emission over 1991-2006 in China

This paper presents a decomposition analysis of energy-related CO₂ emission in China for the period 1991-2006 divided into three equal time intervals. The complete decomposition method developed by Sun is used to analyze the nature of the four factors: CO₂ intensity, energy intensity, structural changes and economic activity. The results show that economic activity has the largest positive effect in CO₂ emission changes in all the major economic sectors and China has achieved a considerable decrease in CO₂ emission mainly due to the improved energy intensity. However, the impact of CO₂ intensity and structural changes is relatively small. Structural changes only exhibit positive effect to the CO₂ mitigation in agricultural sector, and CO₂ intensity also contributes to the decrease of CO₂ emission in transportation sector. Moreover, a formula about CO₂ mitigation is presented in this paper, which shows that China has made a significant contribution to reducing global CO₂ emission.     

Dynamics of pollution control when damage is sensitive to the rate of pollution accumulation

Economic models which take into account the long-term effects of pollution in the environment specify pollution damage as a function of the accumulated stock. Several economists have proposed another formulation where damage is a function of the time derivative of the pollution stock. This paper considers the intertemporal efficiency implications of this formulation. The first specification is qualitative and the objective functional includes both the rate of change and the level of the pollution stock. The second specification is a stylized climate change model with a linear damage function where damage depends only on the rate of increase in global temperature. The analysis reveals that the efficiency properties of optimal pollution control are very sensitive to this change in the damage function. Intertemporal efficiency may require higher emissions compared with the level which is optimal from the myopic point of view. An increase in the rate of discount typically reduces the optimal emission level.     

Fossil fuel subsidies and environmental constraints

Fossil fuel subsidies are applied in many countries for different policy reasons such as maintaining jobs in fossil fuel sectors, securing national energy supply or lowering the energy costs of selected industries to strengthen competitiveness. The current economic costs of fossil fuel subsidy policies can be substantially increased by future environmental constraints. We illustrate this point in the framework of a general equilibrium analysis for Germany where we quantify the economic costs of alternative hard coal subsidy policies at different CO₂ reduction levels. Our calculations show that German hard coal subsidies as a means of retaining jobs can get very expensive with additional specific costs of up to annual 70 000 DM per job for a given CO₂ reduction target of 35%. Though the empirical analysis is focused on Germany the general conclusion that current subsidy policies of fossil fuels must be fundamentally reconsidered in view of forthcoming environmental constraints is also relevant for other countries.     

Distribution Dynamics of CO<Subscript>2</Subscript> Emissions

This paper uses nonparametric methods to examine the convergence in CO₂ emissions per capita on a sample of 100 countries for the period 1966–1996. Industrial countries show a convergence pattern. However, there is little evidence of convergence for the whole sample.     

Decomposing the decoupling of CO2 emissions and economic growth in Brazil

This paper examines the occurrence of a decoupling between the growth rates in economic activity and CO₂ emissions from energy consumption in Brazil from 2004 to 2009. This decoupling was highlighted when economic activity and CO₂ emissions moved in opposite directions in 2009. More generally, we observe several periods of relative decoupling in Brazil, but not to the extent witnessed in 2009. To identify the determinants of emissions change, we develop a decomposition model based on a log-mean Divisia index (LMDI) framework. The results indicate that the carbon intensity and energy mix are the main determinant of emissions reduction in Brazil between 2004 and 2009. Modifications in the economy structure are also associated to emission mitigation in the period. Such evidence demonstrates similarities with events of decoupling registered for the interval 1980-1994 in Brazil. Finds from Brazil differ from observations in other countries in which improvement in energy intensity has been the most common determinant of emissions reduction.     

Norwegian Emissions of CO2 1987–1994 A Study of Some Effects of the CO2 Tax

Several countries have introduced taxes on fossil fuels with the aim of reducing atmospheric emissions, partly because of local environmental goals (SO₂, NO_x) and partly to participate in a global effort to reduce emissions of greenhouse gases. Many macroeconomic studies, based on both global and national models, have been made of how emissions can be reduced with the help of taxes and the consequent reduction in GDP following the introduction of such taxes. Norway has had a CO₂ tax for five years, thereby providing a unique opportunity to evaluate the effects of this tax on emissions. The paper provides a counterfactual analysis of energy consumption and emissions if no CO₂ taxes had been introduced, compared with the actual situation in which such taxes exist. The effect of a CO₂ tax on oil consumption, and thus CO₂ emissions is studied on the basis of partial economic models for various sectors of the Norwegian economy. The study indicates that the CO₂ tax has had an impact on CO₂ emissions in Norway.     

Empirical study on the determinants of CO2 emissions: evidence from OECD countries

This article empirically investigates the Environmental Kuznets Curve (EKC) for CO₂ emissions in the cases of 11 OECD countries by taking into account the role of nuclear energy in electricity production. The autoregressive distributed lag approach to cointegration is employed as the estimation method. Our results indicate that energy consumption has a positive impact on CO₂ emissions in most countries in the study. However, the impact of trade is not statistically significant. The results provide evidence for the role of nuclear power in reducing CO₂ emissions only in some countries. Additionally, although the estimated long-run coefficients of income and its square satisfy the EKC hypothesis in Finland, Japan, Korea and Spain, only Finland's EKC turning point is inside the sample period of the study, providing poor evidence in support of the EKC hypothesis.     

CO2 and Energy Efficiency of Different Heating Technologies in the Dutch Glasshouse Industry

This paper uses Data Envelopment Analysis tocompute input-based technical efficiencymeasures and CO₂ and energy technicalefficiency of specialised vegetable firms inthe Netherlands over the period 1991–1995. Input-based scale efficiency is also calculatedfor each firm. These efficiency measures aregenerated for firms with different heatingtechnologies. The empirical results indicatethat firms use energy quite efficiently and areless efficient in terms of CO₂ emissions. Differences in CO₂ (energy) efficiencyacross different technologies are (not)statistically significant. In particular,firms using traditional heating technologiesare less efficient in terms of CO₂. Scaleadjustments can provide an importantcontribution to further efficiencyimprovements.     

Endogenous technical progress induced by CO2 reduction policies: Simulation results for Austria

Almost all model simulations of CO₂ reduction policies focus on the effects of changes in the relative price of energy compared to the other factors of production caused by various energy taxation schemes. Typical results of these simulations as reported e.g. from the GREEN model of OECD show depressing effects on real GDP and upward pressures on inflation.We propose the hypothesis that these results may be biased due to an inadequate treatment of technical progress and proceed as follows: Firstly, instead of treating technical progress as exogenous we explicitly model theprice induced change of the composition of capital stock of households and producers with its effects on energy efficiency and investment demand. Secondly, we investigate to what extent adouble dividend policy which boosts CO₂ reduction technologies by special programs funded by the additional tax revenues differs from the mere price induced technological changes.We implement these propositions within the framework of a macroeconometric model for Austria which emphasizes substitution between energy and capital in providing energy services for households and producers. The following results are obtained: Firstly, we indicate how misleading the GDP effects may be if they result from lower energy intensities but still maintain the required energy services. Secondly, we investigate the effects of various energy taxation policies under different compensation schemes. Instead of merely relying on price-induced technological change we strongly advocate compensation programs which provide additional incentives for implementing high efficiency energy technologies such as cogeneration equipment or buildings with improved thermal standards.     

Determinants of the global and regional CO2 emissions: What causes what and where?

Using the Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) model and an unbalanced panel dataset of 128 countries covering 1990–2014, this study aims to examine the key impact factors (KIFs) of the global and regional carbon dioxide (CO₂) emissions and analyse the effectiveness of non-renewable and renewable energies. Given the potential cross-sectional dependence and slope heterogeneity, a series of econometric techniques allowing for cross-sectional dependence and slope heterogeneity is applied. The overall estimations imply that the KIFs at the global level are economic growth, followed by population size, non-renewable energy, and energy intensity in order of their impacts on CO₂ emissions; conversely, the KIFs at the regional level vary across different regions and estimators. The results also suggest that renewable energy can lead to a decline in CO₂ emissions at the global level. At the regional level, only for two regions (i.e., S. & Cent. America and Europe & Eurasia) renewable energy has a significant and negative effect on CO₂ emissions, which may be affected by the share of renewable energy consumption in the primary energy mix. Finally, the results indicate varied causality relationships among the variables across regions.

Abbreviations: AMG: Augmented mean group; BP: British Petroleum; BRICS: Brazil, Russia, India, China, and South Africa; CCEMG: Common correlated effects mean group; CD: Cross-section dependence; CIPS: Cross-sectionally augmented Im, Pesaran, and Shin; CO₂: Carbon dioxide; PS: Population size; D-H: Dumitrescu-Hurlin; EI: Energy intensity; EU: European Union; EU-5: Germany, France, Italy, Spain, and the United Kingdom; Europe & Eurasia, Europe and Eurasia; GDP: Gross domestic product; IEA: International Energy Agency; KIF: Key impact factor; LM: Lagrange multiplier; Mtoe, Million tonnes oil equivalent; NRE: Non-renewable energy; RE: Renewable energy; S. & Cent. America, South and Central America; STIRPAT: Stochastic Impacts by Regression on Population, Affluence, and Technology; VECM: Vector error correction model; WDI: World Development Indicators     

Localized innovation, localized diffusion and the environment: an analysis of reductions of CO2 emissions by passenger cars

We investigate technological change with regard to CO₂ emissions by passenger cars, using a Free Disposal Hull methodology to estimate technological frontiers. We have a sample of cars available in the UK market in the period 2000–2007. Our results show that the rates of technological change (frontier movement) and diffusion (distance to frontier at the car brand level) differ substantially between segments of the car market. We conclude that successful policies should be aimed at the diffusion of best-practice technology, and take account of the different potential for further progress between different segments of the market (e.g. diesel vs. gasoline engines and small vs. large engines).

The impact of population on CO<Subscript>2</Subscript> emissions: evidence from European countries

This paper analyses the impact of population growth on CO₂ emissions in European Union countries. Traditionally, researchers have assumed a unitary elasticity of emissions with respect to population growth. In this study population is treated as a predictor in the model, instead of being included as part of the dependent variable (per capita emissions), thus relaxing the above-mentioned assumption of unitary elasticity. We also contribute to the existing literature by taking into account the presence of heterogeneity in the sample and considering a dynamic specification. The sample covers the period 1975–1999 for the current European Union members. Our results show that the impact of population growth on emissions is more than proportional for recent accession countries whereas for old EU members, the elasticity is lower than unity and non significant when the properties of the time series and the dynamics are correctly specified. The different impact of population change on CO₂ emissions for the current EU members should therefore be taken into account in future discussions of climate change policies within the EU.      

Quantification of the environmental impacts of road conditions in Brazil

This study evaluates the impacts of Brazilian highway conditions on fuel consumption and, consequently, on carbon dioxide (CO₂) emissions. For the purpose of this study, highway conditions refer to the level of highway maintenance: the incidence of large potholes, large surface cracks, uneven sections, and debris. Primary computer collected data related to the fuel consumption of three types of trucks were analyzed. The data were derived from 88 trips taken over six routes, each route representative of one of two highway conditions: better or worse. Study results are initially presented for each type of truck being monitored. The results are then aggregated to approximate the entire Brazilian highway network. In all cases, results confirmed environmental benefits resulting from travel over the better routes. There was found to be an increase in energy efficiency from traveling better roads, which resulted in lower fuel consumption and lower CO₂ emissions. Statistical analysis of the results suggests that, in general, fuel consumption data were significant at *P < 0.05, rejecting the null hypothesis that average fuel consumption from traveling the better routes is statistically equal to average fuel consumption from traveling the worse routes. Improved Brazilian road conditions would generate economic benefits, reduce dependency on and consumption of fossil fuels (due to the increase in energy efficiency), and reduce CO₂ emissions. These findings may have additional relevancy if Brazil needs to reduce carbon dioxide emissions to reach future Kyoto Protocol's emissions targets, which should take effect in January 2013.     

Structural decomposition analysis and input-output subsystems: Changes in CO2 emissions of Spanish service sectors (2000-2005)

The analysis of gas emissions by an input-output subsystem approach provides detailed insight into pollution generation in an economy. Structural decomposition analysis, on the other hand, identifies the factors behind the changes in key variables over time. Extending the input-output subsystem model to account for the changes in these variables reveals the channels by which environmental burdens are caused and transmitted throughout the production system. In this paper we propose a decomposition of the changes in the components of CO₂ emissions captured by an input-output subsystems representation. The empirical application is for the Spanish service sector, and the economic and environmental data are for years 2000 and 2005. Our results show that services increased their CO₂ emissions mainly because of a rise in the emissions generated by non-services to cover the final demand for services. The decomposed effects show a decrease in CO₂ emissions due to technological changes between 2000 and 2005 compensated by an increase in emissions caused by the rise in final demand of services. Finally, large asymmetries exist not only in the quantitative changes in the CO₂ emissions of the various services but also in the decomposed effects of these changes.     

The control of CO2 emissions and its economic impact: An AGE model for a german state

Since it is believed that CO₂ is responsible for 55% of the greenhouse effect, a CO₂ levy is now under consideration in several countries. For an assessment of the macroeconomic implications of an integrated energy and environmental policy we employ an applied general equilibrium model (AGE) since all sectors of an economy and all private households contribute to CO₂ emission. Our model is a temporary equilibrium model with capacity extension under adjustment costs and with abatement activities for SO₂ and NO_x emissions.The model of consumer behavior will result in a system of consumer demand functions for non-durables as well as for durable goods. The simulations show the cost of inefficiency in resource allocation if CO₂ taxes differ between industries and households. We finally present the marginal cost curve of CO₂ emission reduction.     

Economic growth and carbon emissions: evidence from CIVETS countries

ABSTRACT

This paper examines whether a long-run relationship exists between CO₂ emissions and selected variables: real gross domestic product per capita, inward stock of foreign direct investments, gross fixed capital formation, industry, value added and energy use per capita for Colombia, Indonesia, Viet Nam, Egypt, Turkey and South Africa countries in the period of 1989–2016. We used panel unit root testing, followed by panel cointegration tests and panel causality. The results clearly prove the existence of a bidirectional long-run causal relationship between all the variables except between CO₂ emissions and GDP and CO₂ emissions and GFCF. Major finding of the short-run causality analysis is that CO₂ emission in the short run does not result in changes of other variables. On the other hand, all variables except foreign direct investments (FDI) cause the changes in the CO₂ emissions, and there is a positive bidirectional causal relationship between GDP and FDI, between GFCF and FDI, and between GFCF and IVA. Finally, positive unidirectional causal relationship also exists, running from GDP to IVA, GDP to ENUSE, IVA to FDI and ENUSE to FDI.