What Does Europe Pay for Clean Energy? Review of Macroeconomic Simulation Studies

29 Pages Posted: 2 Apr 2007 Last revised: 25 Mar 2015

See all articles by Astrid Dannenberg

Astrid Dannenberg

Göteborg University

Tim Mennel

ZEW – Leibniz Centre for European Economic Research; University of Bonn

Ulf Moslener

Frankfurt School of Finance & Management gemeinnützige GmbH

Date Written: 2007

Abstract

This paper analyses the macroeconomic costs of environmental regulation in European energy markets on the basis of existing macroeconomic simulation studies. The analysis comprises the European emission trading scheme, energy taxes, measures in the transport sector, and the promotion of renewable energy sources. We find that these instruments affect the European economy, in particular the energy intensive industries and the industries that produce internationally tradeable goods. From a macroeconomic point of view, however, the costs of environmental regulation appear to be modest. The underlying environmental targets and the efficient design of regulation are key determinants for the cost burden.

Keywords: Environmental regulation, energy market, macroeconomic costs

JEL Classification: Q21, Q28, Q41, Q43, Q48

Suggested Citation

Dannenberg, Astrid and Mennel, Tim and Moslener, Ulf, What Does Europe Pay for Clean Energy? Review of Macroeconomic Simulation Studies (2007). ZEW - Centre for European Economic Research Discussion Paper No. 07-019. Available at SSRN: https://ssrn.com/abstract=976317 or http://dx.doi.org/10.2139/ssrn.976317

Astrid Dannenberg (Contact Author)

Göteborg University ( email )

Viktoriagatan 30
Göteborg, 405 30
Sweden

Tim Mennel

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

University of Bonn ( email )

Regina-Pacis-Weg 3
Postfach 2220
D-53012 Bonn
Germany

Ulf Moslener

Frankfurt School of Finance & Management gemeinnützige GmbH ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

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