Subglobal climate agreements and energy-intensive activities: An evaluation of carbon leakage in the copper industry
Subglobal climate policies induce changes in international competitiveness and favor a relocation of carbon-emitting activities to non-abating regions. In this paper, we evaluate the potential for CO2 abatement and the emissions `leakage' effect in the copper industry, a prominent energy-intensive trade-exposed sector. We formulate a plant-level spatial equilibrium model for copper commodities in which parameters describing the behavioral response of agents are calibrated to econometric estimates of price elasticities. We find producers and consumers to be price inelastic even in the long-run, making the copper industry unresponsive to climate policies. Monte Carlo simulations with our model based on statistical uncertainty on elasticity estimates suggest that around 30% of emissions reductions in industrialized countries would be compensated by an increase of emissions in non-abating countries.
Year of publication: |
2013-02
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Authors: | Lanz, Bruno ; Rutherford, Thomas F. ; Tilton, John E. |
Institutions: | CER-ETH Center of Economic Research, Department of Management, Technology and Economics (D-MTEC) |
Subject: | Carbon leakage | Pollution haven effect | Climate policy | International environmental agreements | International trade | Copper industry |
Saved in:
freely available
Extent: | application/pdf |
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Series: | |
Type of publication: | Book / Working Paper |
Notes: | Number 13/174 40 pages |
Classification: | F18 - Trade and Environment ; F55 - International Institutional Arrangements ; H23 - Externalities; Redistributive Effects ; Environmental Taxes and Subsidies ; Q54 - Climate; Natural Disasters ; Q58 - Government Policy |
Source: |
Persistent link: https://www.econbiz.de/10010610552