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http://ssrn.com/abstract=2179011
 
 

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The Value-Added of Sectoral Disaggregation: Implications on Competitive Consequences of Climate Change Policies


Viktoria Alexeeva-Talebi


Centre for European Economic Research (ZEW)

Christoph Böhringer


University of Oldenburg - Economic Policy; Centre for European Economic Research (ZEW)

Andreas Löschel


Chair of Microeconomics, esp. Energy and Resource Economics

Sebastian Voigt


Centre for European Economic Research (ZEW)

2012

ZEW - Centre for European Economic Research Discussion Paper No. 12-069

Abstract:     
Global impact assessment of unilateral climate policies is commonly based on multi‐sector, multi‐region computable general equilibrium (CGE) models that are calibrated to consistent accounts of production, consumption, and bilateral trade flows. However, global economic databases such as GTAP treat energy-intensive and trade-exposed industries rather in aggregate, thereby missing potentially important details on the heterogeneity of these sectors. In this paper, we elaborate on the availability of data resources and methodological issues in disaggregating energy‐intensive and trade-exposed sectors that receive larger attention in the public policy debate on unilateral emission regulation: non‐ferrous metals, iron and steel and non-metallic minerals. Our sensitivity analysis revolves around three types of unobserved heterogeneity at the sub-sectoral level: trade elasticities, energy consumption and technology specifications. Drawing on the example of border tax adjustments, we find that for all given technology specifications and variation in energy shares, the biggest differences emerge from variations in Armington elasticities. Even moderate changes in Armington elasticities can alter the magnitude and the sign of the effects at the sectoral level. The implications of sub‐sectoral disaggregation are not as pronounced for macroeconomic indicators and leakage as for sectoral indicators.

Number of Pages in PDF File: 45

Keywords: Sectoral disaggregation, emissions trading, border adjustment, competitiveness, carbon leakage

JEL Classification: D58, H21, H22, Q48

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Date posted: November 23, 2012  

Suggested Citation

Alexeeva-Talebi, Viktoria and Böhringer, Christoph and Löschel, Andreas and Voigt, Sebastian, The Value-Added of Sectoral Disaggregation: Implications on Competitive Consequences of Climate Change Policies (2012). ZEW - Centre for European Economic Research Discussion Paper No. 12-069. Available at SSRN: http://ssrn.com/abstract=2179011 or http://dx.doi.org/10.2139/ssrn.2179011

Contact Information

Viktoria Alexeeva-Talebi (Contact Author)
Centre for European Economic Research (ZEW) ( email )
P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany
Christoph Bohringer
University of Oldenburg - Economic Policy ( email )
Centre for European Economic Research (ZEW) ( email )
D-68161 Mannheim
Germany
+49 6211235200 (Phone)
+49 6211235226 (Fax)
Andreas Löschel
Chair of Microeconomics, esp. Energy and Resource Economics ( email )
Universitätsstr. 14-16
48143 Munster
Germany
HOME PAGE: http://www.wiwi.uni-muenster.de/eroe
Sebastian Voigt
Centre for European Economic Research (ZEW) ( email )
P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany
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