Transportation and Emission Trading - A CGE Analysis for the EU 15

23 Pages Posted: 9 Jul 2008 Last revised: 14 Jul 2008

See all articles by Jan Abrell

Jan Abrell

ETH Zürich - Centre for Energy Policy and Economics (CEPE)

Date Written: October 1, 2007

Abstract

Transportation, the second largest contributor of CO2 emissions, is not part of the European Emission Trading System. Since transportation is subject to national environmental instruments, this causes differences in marginal abatement costs, and hence, results in economic inefficiencies. We analyze the welfare effects of including transportation in the European emission trading system in a static multi-region CGE model of the EU 15. Our results show that the inclusion road transportation provides a high welfare gains for Europe. Including aviation leads to smaller welfare gain. Concerning water transportation, our analysis indicates the importance of carbon regulation of maritime shipping for international trade.

Keywords: Transportation, Emission Trading, Computable General Equilibrium

JEL Classification: D58, L91, Q51

Suggested Citation

Abrell, Jan, Transportation and Emission Trading - A CGE Analysis for the EU 15 (October 1, 2007). Available at SSRN: https://ssrn.com/abstract=1157389 or http://dx.doi.org/10.2139/ssrn.1157389

Jan Abrell (Contact Author)

ETH Zürich - Centre for Energy Policy and Economics (CEPE) ( email )

8092 Zurich
Switzerland

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