Event Information
The next EEU seminar will be held on Monday the 10th of February at 12:10 – 13:15 in E45.
The seminar will be held by Knut Einar Rosendahl and he will be presenting a paper on the topic of: Combining policies to effectively mitigate carbon leakage and improve welfare. Rosendahl is a Professor at NMBU and a researcher at Statistics Norway. His work focuses on environmental and energy economics, particularly policies to address carbon leakage and reduce greenhouse gas emissions. His current research examines optimal policy combinations to enhance global cost-effectiveness in climate mitigation.
When: Monday, February 10th at 12:10-13:00.
Where: E45 or via Zoom.
Speaker: Knut Einar Rosendahl
Title: Measures against carbon leakage – combining output-based allocation with consumption tax
Abstract: Countries with ambitious climate targets are concerned about carbon leakage to other countries. A common measure against leakage is output-based allocation of emissions allowances, whose effectiveness could be enhanced by consumption taxes levied on the carbon intensity of goods. We combine theoretical and numerical analysis to derive optimal combinations of output-based allocation and consumption taxes, where ‘optimal’ means from a regional or global welfare perspective. Different assumptions on the stringency of emissions reduction targets, the coverage of emissions in regulated sectors, and their trade exposure are considered. A key analytical finding is that output-based allocation and consumption taxes are complements rather than substitutes. A key numerical finding is that the output-based allocation and consumption tax should be set at almost the same rate, and increase substantially with the stringency of the emissions reduction targets. Another key finding is that inclusion of Scope 2 emissions is crucial for the optimal policy.