This paper analyses the effects of enhanced trade between Austria and its four neighbouring Central and Eastern European countries (Czech Republic, Slovak Republic, Hungary, Slovenia) on sectoral production and regional welfare in Austria. The analysis is based on two distinct modelling traditions at the centre of regional science. The first model (a Fischer-Johansson Model of bilateral trade flows) is used to predict the volume and commodity composition of future trade flows based on a long term income scenario. The predicted long-term increases of the trade flows are huge. Exports rise by 190 % and imports by 160 % (compared to 1995). The effects of these trade flows on sectoral production and regional welfare in Austria are simulated by means of a multiregional computable general equilibrium model for the Austrian economy. The model contains the 9 Federal Provinces (NUTS-II). The likely implications of the projected trade flows are measured in terms of real income, which can be expected to rise by 1.2 %. The welfare gains will not necesarily be shared equally by all Federal Provinces. The results indicate a clear East-West pattern with the eastern regions of Austria gaining most. (authors' abstract) / Series: Discussion Papers of the Institute for Economic Geography and GIScience

Submitted by Renata Lopes (renatasil82@gmail.com) on 2016-07-22T18:07:48Z No. of bitstreams: 1 ramongoulartcunha.pdf: 1428682 bytes, checksum: 586dd29c2871c103ab232e4a01a40830 (MD5) / Approved for entry into archive by Adriana Oliveira (adriana.oliveira@ufjf.edu.br) on 2016-07-25T16:32:00Z (GMT) No. of bitstreams: 1 ramongoulartcunha.pdf: 1428682 bytes, checksum: 586dd29c2871c103ab232e4a01a40830 (MD5) / Made available in DSpace on 2016-07-25T16:32:00Z (GMT). No. of bitstreams: 1 ramongoulartcunha.pdf: 1428682 bytes, checksum: 586dd29c2871c103ab232e4a01a40830 (MD5) Previous issue date: 2016-04-08 / CAPES - Coordenação de Aperfeiçoamento de Pessoal de Nível Superior / FAPEMIG - Fundação de Amparo à Pesquisa do Estado de Minas Gerais / O objetivo desta dissertação consiste em avaliar os possíveis desdobramentos da política de expansão das exportações brasileiras para com os mercados latino-americanos. De forma específica, pretende-se analisar quais seriam os prováveis desfechos macroeconômicos e setoriais da busca por maior inserção e competitividade das exportações brasileiras na região da América Latina e Caribe. A partir de um modelo de Equilíbrio Geral Computável (EGC) (LATES-BR (Perobelli et al., 2015), os vínculos intersetoriais, bem como os efeitos de segunda ordem e substituição, são considerados nas projeções. O Plano Nacional de Exportações 20152018 (PNE 2015-2018) serve como base, na medida em que relaciona os produtos e mercados em potencial na região. Os principais resultados alcançados apontam para uma variação positiva sobre o Produto Interno Bruto (PIB) em aproximadamente 0,15 a 0,16%, e sugerem um aumento entre 0,11 e 0,13% para o emprego agregado, no curto prazo. Por sua vez, no ambiente econômico de longo prazo, o PIB tende a crescer de 0,18 a 0,20%, e o salário real possivelmente se eleva de 0,49 a 0,50%. Em termos setoriais, os produtos com maiores demandas por ganhos de eficiência produtiva (isto é, com maiores exigências por aumento de produtividade) corresponde à Óleos e gorduras vegetais e animais, Carne de suíno, Bovinos e outros animais vivos, Produtos de madeira, exclusive móveis, Defensivos agrícolas e desinfetantes domissanitários, Produtos químicos diversos, Automóveis, camionetas e utilitários e Caminhões e ônibus, inclusive cabines, carrocerias e reboques. Em virtude da heterogeneidade no que tange a intensidade e substituição no uso dos fatores primários, às variações sobre a produtividade podem ser maiores (ou menores) a depender do modo como se dá a melhoria de eficiência produtiva (de modo geral, somente pelo trabalho ou exclusivamente pelo capital). Um exemplo se aplica ao Minério de ferro, que por ser intensivo no uso do fator capital exige um esforço produtivo muito elevado quando o ganho de eficiência produtiva se dá pelo trabalho. Destarte, acredita-se que as técnicas utilizadas nesta dissertação, assim como os resultados nela projetados, possam servir de instrumento para os agentes da política comercial brasileira. Em destaque, nas discussões sobre factibilidade e efeitos das políticas de comércio e metas traçadas (ou a serem traçadas) no PNE 2015-2018. / The aim of this work is to evaluate the possible consequences of the expansion of Brazilian exports policy towards the Latin American markets. Specifically, it intends to analyze what are the likely macroeconomic and sectoral outcomes of the search for greater integration and competitiveness of Brazilian exports in the Latin American and Caribbean region. From a Computable General Equilibrium (CGE) model (LATES-BR (Perobelli et al., 2015), intersectoral linkages, as well as second-round effects and replacement, are considered in the projections. The National Export Plan 2015-2018 (PNE 2015-2018) serves as a reference to the extent that relates potential products and markets in the region. The main results point to a positive growth of Gross Domestic Product (GDP) by about 0.15 to 0.16%, and suggest an increase between 0.11 and 0.13% for the aggregate employment in the short run. In turn, the long run economic environment, the GDP tends to increase from 0.18 to 0.20%, and salary real possibly rises from 0.49 to 0.50%. In terms of sectors, products with higher demands for productive efficiencies (i.e., with greater demands for increased productivity) match Oils and vegetable and animal fats, Pork, Cattle and other live animals, wood products, furniture exclusive, Pesticides and household cleaning disinfectants, Various chemicals products, Cars, trucks and SUVs and trucks and buses, including cabins, truck bodies and trailers. Because of heterogeneity regarding the intensity and replace the use of primary factors, the variations on productivity may be higher (or lower) depending on the way how is the improvement of production efficiency (generally, only at work or only by capital). An example applies to the iron ore, which should be intensive in the use of capital factor requires a very high productive effort when the gain productive efficiency is through work. Thus, it is believed that the techniques used in this work, as well as the results designed from this work can serve as a tool for agents of Brazil's trade policy. Highlighted in discussions about feasibility and effects of trade policies and targets set (or to be traced) in the PNE 2015-2018.

One fundamental point of departure for this thesis is the importance of addressing all three basic economic research questions: what is produced, with what and for whom and including them in the discussion regarding long-term macroeconomic performance. This could also be stated as that a consistent historical national accounts approach where both aspects of production and distribution are included can significantly enhance the research on macroeconomic historical issues. Built upon this foundation, the objective of this thesis is twofold. To begin with, the objective includes the broadening of the empirical database of the Swedish historical national accounts (SHNA) with accounts for the process involving the horizontal distribution of income. The second objective of this thesis consists of conducting analyses of the Swedish macroeconomic devel­opment using the extended database of the SHNA. An important aspect of the analytical objective involves the exploration of methods that had not widely been applied in Swedish economic historical research. Thus, great emphasis is placed on the methodology used in the analyses of macroeconomic development. These two main objectives forni the disposition of the thesis. The first empirical part consists of work with income accounts in the SHNA. This work has resulted in the establishment of a set of income accounts concur­ring with the procedure recommended in the contemporary national accounting system. In the second part of the thesis, selected macroeconomic issues are examined using the extended SHNA database. The first analysis consists of a closer examination of the presence of periodization patterns in Swedish growth and structural change. In this chapter an analysis based on structural time series models is applied to the SHNA series. The main results of this chapter is that the time series on growth and structural change reveal a pattern that not unconditionally is consistent with the prevailing periodisation pattern recognised in Swedish economic-historical research. Instead, the development pattern reveals features found in international research. The next analysis is concerned with the role of specific institutions for contributing to the slow-down in growth that occurred from the late 1960s and throughout the 1970s and 1980s. In this chapter the importance of the corporate tax system, investment funds and the public pension funds for the efficiency of the resource alloca­tion process is examined. The hypothesis that is examined is that these institutional arrangements altered the distribution of income in such a way that the investment allocation was disturbed and thereby leading to ineffi­ciencies that affected long-term growth negatively. This hypothesis is supported by empirical evidence on changes in the income distribution and changes in long-term rates of growth and structural change. Thus, the investigated institutional arrangements to a certain extent had a negative effect on the Swedish economic per­formance during the 1960s to the 1980s. In the final analytical chapter, the objective is mainly methodological. Here, the focus is on the potential application of CGE-models as a tool for examining Swedish macroeconomic history. A fairly straightforward CGE-model is formulated for the period 1910 to 1930 and estimated using the broadened SHNA. The predic­tions of the model are evaluated against the actual historical development in order to assess the performance of the model. As the model formulated in this chapter generates accurate prediction of the main macroeconomic indicators, it is subsequently used in a counterfactual analysis of the impact of total factor productivity growth on the overall growth performance. In summary, the thesis demonstrates that much can be achieved in the research on the Swedish macroeco­nomic development by utilizing new theoretical approaches and applying state of the art analysis methods as a complement to the structural analytical research that has been conducted previously. However, much research is still required, especially on the improvement of the macroeconomic database where one priority is to create detailed and consistent input-output tables and social accounting matrices. / digitalisering@umu

Globalization is the increasing world-wide integration of markets for goods, services, labor, and capital. It seems to increasingly dominate discussion on the direction of social change and representations of the world. This study is of no exception; it provides an overview on the economic aspects of globalization. It mainly focuses on economic integration, trade patterns of multinational firms and international labor movement. As part of the analysis, international labor movement is centered on the inflow of unskilled labor into host country and the effects they brings along to the welfare of local populations. Particular attention is also given to the construction sector. International trade grows rapidly along with the progress of globalization. The massive development of new communication and transportation technology has made possible for heterogeneous firms to look for optimum production allocation worldwide. There has however been massive debates among researchers on the conditions that firms decided upon when choosing the production allocation, i.e; whether to locate in one country and export to another or to locate in both countries at the same time. The study proposes a general equilibrium model in order to understand the mechanism of decision behavior of heterogeneous firms on production allocation. Apart from that, international labor movement is an important dimension of globalization and has become increasingly embedded in changes in global economic and social structures. Like the rest of the world, Malaysia is affected by globalization. The wide economic and demographic differences between Malaysia and its immediate neighbors triggered the cross-border movement of labor. The country began to rely on foreign labor, particularly unskilled labor, due to the structural changes and labor market segmentation that first emerged in the early 1970s. The unprecedented influx of these labors, following unabated high growth since the mid-1980s, raised several social, political and economic concerns. The popular perception was that foreign labors were affecting local unskilled labors, both in terms of wages and living standards. It is important to note that the vast majority of preceding discussions on the subject are from the social and political point of view. There is however lack of discussions from economic and quantitative perspective. This study endeavors to fill in these gaps and contribute to the body of knowledge. Consequently, empirical analysis is accomplished using CGE modeling on international labor movement in Malaysia. And this is the first attempt such approach is carried out thus far. / Kyoto University (京都大学) / 0048 / 新制・課程博士 / 博士(工学) / 甲第14920号 / 工博第3147号 / 新制||工||1472(附属図書館) / 27358

EMEC är en allmänjämviktsmodell som har använts av Konjunkturinstitutet för att beräkna samhällsekonomiska kostnader av styrmedel, och utvärdera kostnadseffektivitet som en del av det svenska klimatpolitiska beslutsunderlaget. Med anledning av kritik som har riktats mot modellen har detta examensarbete syftat till att analysera EMEC och dess effekter i klimatpolitiken, samt belysa och diskutera aspekter som eventuellt behövs utvecklas eller hanteras på ett annat sätt i den svenska klimatpolicyutvärderingen. En intervju - och litteraturstudie bidrog med ett kontrasterande aktörsperspektiv på olika identifierade nyckelaspekter som sedan utgjorde ett ramverk för analysen av en efterföljande empirisk studie. Resultaten visar att det finns starka skäl att påstå att modellen har överskattat kostnader av utsläppsminskningar vilket sannolikt har påverkat Sveriges klimatpolitiska inriktning. I direkt anknytning till modellen argumenteras detta bero på svårigheten i att göra antaganden om framtida teknik-och prisutvecklingar, samt på modellens statiska utformning. I samband med modellens klimatpolitiska roll kan det argumenteras bero på ett relativt kortsiktigt tidsperspektiv och en endimensionell bedömning av klimatomställningens nytta i relation till klimatfrågans långsiktighet och flerdimensionella nyttosida. Det kan också påpekas att detta fördyrar klimatpolitiken på lång sikt. En alternativ klimatpolicyutvärdering tillämpar ett bredare grepp genom att exempelvis inkludera de dynamiska kostnader som är förknippade med inlåsningseffekter i kolintensiva strukturer, vilket med en kontrafaktisk jämförelse sänker kostnaden av en klimatpolicy. Vid fortsatt styrmedelsutvärdering med EMEC föreslås en förändring av hur resultaten ska tolkas. Givet att det politiska sammanhanget också fortsättningsvis kräver kvantitativa underlag finns det ett behov av en mer varierad klimatpolicyutvärdering, där också kvalitativa aspekter och fler indikatorer än BNP beaktas som komplement. / EMEC is a computational general equilibrium (CGE) model used for calculation of societal costs and evaluation of cost-effectiveness in the decision basis of Swedish climate policy. The model has been criticized for exaggerating societal costs of policies, exemplified by Sweden's relative decoupling of GDP and carbon dioxide emissions during 1990-2010. Thereby, one could argue that the model results possibly have led to less ambitious climate targets in Sweden. With the model's suitability being questioned and an expressed need for better climate policy evaluation, this master thesis aims to analyse EMEC and its effects on Sweden's climate policy. It also aims to highlight key aspects for improved climate policy evaluation. Literature and interview studies were conducted in order to form a balanced framework of different actors' perspectives on the issue. This related to several identified aspects that were considered important by the authors in the context of the EMEC model. The subsequent empirical study of three periods of Swedish climate-political processes used these results as a basis for discussion. The results imply that the critique about exaggerated costs very likely is justified, which probably also has affected Sweden's climate-political direction. Regarding the model itself, the principal reasons are argued to be its static nature and the difficulties associated with predicting future technological- and world-market price developments. Connected to the model's role, the principal reasons are argued to be rooted in its relatively short-term perspective and one-dimensional definition of benefits, compared to the long-term and multi-dimensional nature of a transition to a low-carbon society. These features have, in this study, been argued to weaken the long-term cost-effectiveness of Sweden's climate policy. The EMEC-model's principal effects in this respect have been constituted in the arguments for general policies over sector-specific goals as well as emission reductions abroad. An alternative evaluation framework would include a wider range of benefits and costs associated with climate policy, for example dynamic costs of lock-in effects in carbon intensive structures. This would decrease the costs of climate policy in a counter-factual comparison. It could be argued that a qualitative decision basis would be more appropriate considering the complexities and difficulties associated with modelling a largely uncertain future. Especially, since model results are based on the same historic trends that need to be abandoned in order to reach future climate targets. However, considering that the climate-political process demands a quantitative decision-basis, qualitative aspects should function as a complement and gain increased emphasis in the Swedish climate- political decision basis. This would purposively broaden the framework and serve as a necessary balance to the indications given by results on GDP. Given that the EMEC model to some extent continues to constitute a basis for climate policy, suggestions for alternative interpretations of the model results have also been provided.

Thesis Abstract: Chapter I: Regional burden sharing of GHG mitigation policies – A Canadian perspective. The distribution of the burden of cost arising from the reduction of greenhouse gas (GHG) emissions is a contentious issue in policy discussions; more so among regional jurisdictions in the federalist countries with decentralized authorities over environmental regulations. In this setting, often the policy discussions are focused on the distribution of regional emission reduction targets that, in turn, entails negotiations over the distribution of the scarcity rents and the regional transfers of wealth. The allocation of regional emission entitlements is thus a key factor that could hinder the political feasibility of a national GHG mitigation policy. In this paper, we build a multi-region computable general equilibrium (CGE) model of the Canadian economy to assess the implications of different burden sharing rules governing the national GHG abatement policy with a cap-and-trade system of emission permits. In addition to assessing the impacts of traditional regional emissions allocation rules that involve intra-regional transfers of wealth, we consider a particular emission allocation that avoids such transfers, which may be a more palatable option given the context of likely fierce negotiations over the issue. Our results indicate to differing outcomes depending on the allocation policy in use. The CGE framework is also able to shed light on the transmission mechanisms that drive the results underlying the policy options. Chapter II: Endogenous technological change and emission allowances. Given the imminent threat of global warming due to GHG emissions, a number of emission mitigation policies have been proposed in the literature. However, they generally suffer from the classical equity-efficiency trade-off. High costs from equity concerns often render environmental policies politically unattractive and thus hard to implement. Recent advancement in the climate policy modeling literature that incorporates endogenous technological change (ETC) into the framework can potentially bring new insights into this debate. Using an inter-temporal, multi-sector CGE approach with ETC incorporated into the framework, this paper builds a model that focuses on the equity-efficiency debate for the policymakers. Canada is chosen as the country of investigation for this purpose. The paper provides a new welfare ranking of four permit allocation policies that address the equity-efficiency trade-off. In a second-best setting with pre-existing distortions, output-based allocation (OBA) of emission permits is compared to three other policy options: (i) an emissions trading system with grandfathered allocation (GFA), (ii) an auction permit trading system where permit revenue is recycled to lower payroll taxes (RPT), and (iii) a hybrid of OBA and R&D subsidy (O-R&D). We find that adapting OBA, as well as O-R&D, is welfare improving over GFA. The implicit output subsidy, entailed in the OBA policy, mitigates against the rising cost effect in the GFA policy. This is reinforced through added investment incentive in R&D when ETC in incorporated into the framework. With O-R&D, since the R&D subsidy corrects for market imperfections in the knowledge accumulation process, the effect is further bolstered, culminating into mitigation of uneven distributional outcome for energy-intensive industries as a whole. Contrary to previous results, we also find that, in terms of the welfare metric, OBA unequivocally improves the distributional outcome across sectors as compared to the RPT policy. Inclusion of ETC also unequivocally generates a higher welfare ranking for all permit policy schemes. Chapter III: Emission permit banking and induced technological change. This paper attempts to undertake an exploratory research by integrating two themes in the emission mitigation policy literature, which include: the inter-temporal emission permit banking and borrowing and the role of induced technological change in emission mitigation. Using a simple optimal control approach, we construct a unified framework that evaluates the optimal path of emissions and the optimal trajectory of permit price when both inter-temporal banking and borrowing of permits and the effects of induced technological change (ITC) are present. We find that ITC leads to a declining emission trajectory over time. The effect of ITC on the optimal permit price path, however, is ambiguous and critically depends on the extent of marginal cost saving that emanates from emission-saving technological innovation.

Thesis Abstract: Chapter I: Regional burden sharing of GHG mitigation policies – A Canadian perspective. The distribution of the burden of cost arising from the reduction of greenhouse gas (GHG) emissions is a contentious issue in policy discussions; more so among regional jurisdictions in the federalist countries with decentralized authorities over environmental regulations. In this setting, often the policy discussions are focused on the distribution of regional emission reduction targets that, in turn, entails negotiations over the distribution of the scarcity rents and the regional transfers of wealth. The allocation of regional emission entitlements is thus a key factor that could hinder the political feasibility of a national GHG mitigation policy. In this paper, we build a multi-region computable general equilibrium (CGE) model of the Canadian economy to assess the implications of different burden sharing rules governing the national GHG abatement policy with a cap-and-trade system of emission permits. In addition to assessing the impacts of traditional regional emissions allocation rules that involve intra-regional transfers of wealth, we consider a particular emission allocation that avoids such transfers, which may be a more palatable option given the context of likely fierce negotiations over the issue. Our results indicate to differing outcomes depending on the allocation policy in use. The CGE framework is also able to shed light on the transmission mechanisms that drive the results underlying the policy options. Chapter II: Endogenous technological change and emission allowances. Given the imminent threat of global warming due to GHG emissions, a number of emission mitigation policies have been proposed in the literature. However, they generally suffer from the classical equity-efficiency trade-off. High costs from equity concerns often render environmental policies politically unattractive and thus hard to implement. Recent advancement in the climate policy modeling literature that incorporates endogenous technological change (ETC) into the framework can potentially bring new insights into this debate. Using an inter-temporal, multi-sector CGE approach with ETC incorporated into the framework, this paper builds a model that focuses on the equity-efficiency debate for the policymakers. Canada is chosen as the country of investigation for this purpose. The paper provides a new welfare ranking of four permit allocation policies that address the equity-efficiency trade-off. In a second-best setting with pre-existing distortions, output-based allocation (OBA) of emission permits is compared to three other policy options: (i) an emissions trading system with grandfathered allocation (GFA), (ii) an auction permit trading system where permit revenue is recycled to lower payroll taxes (RPT), and (iii) a hybrid of OBA and R&D subsidy (O-R&D). We find that adapting OBA, as well as O-R&D, is welfare improving over GFA. The implicit output subsidy, entailed in the OBA policy, mitigates against the rising cost effect in the GFA policy. This is reinforced through added investment incentive in R&D when ETC in incorporated into the framework. With O-R&D, since the R&D subsidy corrects for market imperfections in the knowledge accumulation process, the effect is further bolstered, culminating into mitigation of uneven distributional outcome for energy-intensive industries as a whole. Contrary to previous results, we also find that, in terms of the welfare metric, OBA unequivocally improves the distributional outcome across sectors as compared to the RPT policy. Inclusion of ETC also unequivocally generates a higher welfare ranking for all permit policy schemes. Chapter III: Emission permit banking and induced technological change. This paper attempts to undertake an exploratory research by integrating two themes in the emission mitigation policy literature, which include: the inter-temporal emission permit banking and borrowing and the role of induced technological change in emission mitigation. Using a simple optimal control approach, we construct a unified framework that evaluates the optimal path of emissions and the optimal trajectory of permit price when both inter-temporal banking and borrowing of permits and the effects of induced technological change (ITC) are present. We find that ITC leads to a declining emission trajectory over time. The effect of ITC on the optimal permit price path, however, is ambiguous and critically depends on the extent of marginal cost saving that emanates from emission-saving technological innovation.

Thesis Abstract: Chapter I: Regional burden sharing of GHG mitigation policies – A Canadian perspective. The distribution of the burden of cost arising from the reduction of greenhouse gas (GHG) emissions is a contentious issue in policy discussions; more so among regional jurisdictions in the federalist countries with decentralized authorities over environmental regulations. In this setting, often the policy discussions are focused on the distribution of regional emission reduction targets that, in turn, entails negotiations over the distribution of the scarcity rents and the regional transfers of wealth. The allocation of regional emission entitlements is thus a key factor that could hinder the political feasibility of a national GHG mitigation policy. In this paper, we build a multi-region computable general equilibrium (CGE) model of the Canadian economy to assess the implications of different burden sharing rules governing the national GHG abatement policy with a cap-and-trade system of emission permits. In addition to assessing the impacts of traditional regional emissions allocation rules that involve intra-regional transfers of wealth, we consider a particular emission allocation that avoids such transfers, which may be a more palatable option given the context of likely fierce negotiations over the issue. Our results indicate to differing outcomes depending on the allocation policy in use. The CGE framework is also able to shed light on the transmission mechanisms that drive the results underlying the policy options. Chapter II: Endogenous technological change and emission allowances. Given the imminent threat of global warming due to GHG emissions, a number of emission mitigation policies have been proposed in the literature. However, they generally suffer from the classical equity-efficiency trade-off. High costs from equity concerns often render environmental policies politically unattractive and thus hard to implement. Recent advancement in the climate policy modeling literature that incorporates endogenous technological change (ETC) into the framework can potentially bring new insights into this debate. Using an inter-temporal, multi-sector CGE approach with ETC incorporated into the framework, this paper builds a model that focuses on the equity-efficiency debate for the policymakers. Canada is chosen as the country of investigation for this purpose. The paper provides a new welfare ranking of four permit allocation policies that address the equity-efficiency trade-off. In a second-best setting with pre-existing distortions, output-based allocation (OBA) of emission permits is compared to three other policy options: (i) an emissions trading system with grandfathered allocation (GFA), (ii) an auction permit trading system where permit revenue is recycled to lower payroll taxes (RPT), and (iii) a hybrid of OBA and R&D subsidy (O-R&D). We find that adapting OBA, as well as O-R&D, is welfare improving over GFA. The implicit output subsidy, entailed in the OBA policy, mitigates against the rising cost effect in the GFA policy. This is reinforced through added investment incentive in R&D when ETC in incorporated into the framework. With O-R&D, since the R&D subsidy corrects for market imperfections in the knowledge accumulation process, the effect is further bolstered, culminating into mitigation of uneven distributional outcome for energy-intensive industries as a whole. Contrary to previous results, we also find that, in terms of the welfare metric, OBA unequivocally improves the distributional outcome across sectors as compared to the RPT policy. Inclusion of ETC also unequivocally generates a higher welfare ranking for all permit policy schemes. Chapter III: Emission permit banking and induced technological change. This paper attempts to undertake an exploratory research by integrating two themes in the emission mitigation policy literature, which include: the inter-temporal emission permit banking and borrowing and the role of induced technological change in emission mitigation. Using a simple optimal control approach, we construct a unified framework that evaluates the optimal path of emissions and the optimal trajectory of permit price when both inter-temporal banking and borrowing of permits and the effects of induced technological change (ITC) are present. We find that ITC leads to a declining emission trajectory over time. The effect of ITC on the optimal permit price path, however, is ambiguous and critically depends on the extent of marginal cost saving that emanates from emission-saving technological innovation.

Thesis Abstract: Chapter I: Regional burden sharing of GHG mitigation policies – A Canadian perspective. The distribution of the burden of cost arising from the reduction of greenhouse gas (GHG) emissions is a contentious issue in policy discussions; more so among regional jurisdictions in the federalist countries with decentralized authorities over environmental regulations. In this setting, often the policy discussions are focused on the distribution of regional emission reduction targets that, in turn, entails negotiations over the distribution of the scarcity rents and the regional transfers of wealth. The allocation of regional emission entitlements is thus a key factor that could hinder the political feasibility of a national GHG mitigation policy. In this paper, we build a multi-region computable general equilibrium (CGE) model of the Canadian economy to assess the implications of different burden sharing rules governing the national GHG abatement policy with a cap-and-trade system of emission permits. In addition to assessing the impacts of traditional regional emissions allocation rules that involve intra-regional transfers of wealth, we consider a particular emission allocation that avoids such transfers, which may be a more palatable option given the context of likely fierce negotiations over the issue. Our results indicate to differing outcomes depending on the allocation policy in use. The CGE framework is also able to shed light on the transmission mechanisms that drive the results underlying the policy options. Chapter II: Endogenous technological change and emission allowances. Given the imminent threat of global warming due to GHG emissions, a number of emission mitigation policies have been proposed in the literature. However, they generally suffer from the classical equity-efficiency trade-off. High costs from equity concerns often render environmental policies politically unattractive and thus hard to implement. Recent advancement in the climate policy modeling literature that incorporates endogenous technological change (ETC) into the framework can potentially bring new insights into this debate. Using an inter-temporal, multi-sector CGE approach with ETC incorporated into the framework, this paper builds a model that focuses on the equity-efficiency debate for the policymakers. Canada is chosen as the country of investigation for this purpose. The paper provides a new welfare ranking of four permit allocation policies that address the equity-efficiency trade-off. In a second-best setting with pre-existing distortions, output-based allocation (OBA) of emission permits is compared to three other policy options: (i) an emissions trading system with grandfathered allocation (GFA), (ii) an auction permit trading system where permit revenue is recycled to lower payroll taxes (RPT), and (iii) a hybrid of OBA and R&D subsidy (O-R&D). We find that adapting OBA, as well as O-R&D, is welfare improving over GFA. The implicit output subsidy, entailed in the OBA policy, mitigates against the rising cost effect in the GFA policy. This is reinforced through added investment incentive in R&D when ETC in incorporated into the framework. With O-R&D, since the R&D subsidy corrects for market imperfections in the knowledge accumulation process, the effect is further bolstered, culminating into mitigation of uneven distributional outcome for energy-intensive industries as a whole. Contrary to previous results, we also find that, in terms of the welfare metric, OBA unequivocally improves the distributional outcome across sectors as compared to the RPT policy. Inclusion of ETC also unequivocally generates a higher welfare ranking for all permit policy schemes. Chapter III: Emission permit banking and induced technological change. This paper attempts to undertake an exploratory research by integrating two themes in the emission mitigation policy literature, which include: the inter-temporal emission permit banking and borrowing and the role of induced technological change in emission mitigation. Using a simple optimal control approach, we construct a unified framework that evaluates the optimal path of emissions and the optimal trajectory of permit price when both inter-temporal banking and borrowing of permits and the effects of induced technological change (ITC) are present. We find that ITC leads to a declining emission trajectory over time. The effect of ITC on the optimal permit price path, however, is ambiguous and critically depends on the extent of marginal cost saving that emanates from emission-saving technological innovation.

科学研究費補助金 研究種目:一般研究(C) 課題番号:06630020 研究代表者:江崎 光男 研究期間:1994-1995年度 Discussion Paper No.41 中国経済のインフレーションと価格競争力 江崎光男･伊藤正一･王名･板倉健 1996年3月を含む