We study how European climate and energy policy targets affect different member states and households of different income quintiles within the member states. We find that renewable energy targets in power generation, by reducing EU ETS permit prices, may make net permit exporters worse off and...

The international shipping sector is a vital part of the global trading system but also a large emitter of carbon dioxide emissions. In the absence of a multilateral carbon policy for the shipping sector, different countries are starting to impose unilateral measures to decarbonize maritime...

With the new rules of the EU ETS, involving cancellation of allowances, cumulative emissions are no longer fixed but depending on the market outcome. Perino (2018) showed that additional abatement effort can reduce cumulative emissions if it occurs within a few years. This article shows that...

Carbon taxes are commonly seen as a rational policy response to climate change, but little is known about their performance from an ex-post perspective. This paper analyzes the emissions and cost impacts of the UK CPS, a carbon tax levied on all fossil-fired power plants. To overcome the problem...

This paper analyses the impact of carbon pricing on residential heating affordability using a theoretical household model with endogenous choice of a renewable heating technology. We compare two compensation policies: a renewable heating subsidy and a lump-sum transfer. The subsidy is the most...

This paper examines the prices versus quantities issue, originally raised by Weitzman [8], in the context of carbon dioxide emissions and with a special focus on electricity generation. Within a simpli ed model of the electricity market, in which we explicitly allow for a monopolistic gas...

In our analytical general equilibrium model where two polluting inputs can be substitutes or complements in production, we study the effects of a tax on one pollutant in two cases: one where both pollutants face taxes and the second where the other pollutant is subject to a permit policy. In...

Economic literature generally favours market-based instruments for regulating environmental externalities since they ensure compliance at the least cost to society. Emission taxes have been increasingly introduced internationally, with the focus shifting to CO2 after the adoption of the Kyoto...

This paper evaluates alternative options for rebating revenues from a unilateral emissions price, focusing on energy-intensive and trade-exposed industries. A theoretical model is developed to demonstrate that conditional rebating policies—which would be distortionary in a first-best...

We investigate productivity and cost pass-through of German manufacturing firms using administrative data from 2001 to 2014. Our framework allows for the estimation of quantity-based production functions for multi-product firms while controlling for unobserved productivity shocks and unobserved...