Sectoral Incidence and Efficiency of Climate Policy

The EU advocates minimising potentially significant competitiveness losses in energy-intensive industries as a politically feasible approach to climate policy. This book analyses industry-distributional effects of European climate policy and evaluates different policy designs tailored to neutralise detrimental impacts of ambitious climate actions on competitiveness of domestic energy-intensive branches. The numerical analysis shows that alternative policy designs may considerably differ in terms of macroeconomic implications. Unilateral policies, i.e. inter-sectoral carbon price differentiation strategies and different forms of border adjustments, have the potential to neutralise adverse implications on competitiveness of energy-intensive industries in Europe. But these measures can induce significant economic inefficiencies. The gradual movement towards a global carbon regime represents a superior alternative to unilateral measures. It allows realising a cost-efficient and globally effective climate policy while limiting negative impacts on competitiveness of domestic industries.

Autorentext

Victoria Alexeeva-Talebi studied Economics at the Humboldt University of Berlin, Germany. Since 2006, she has been employed as a research fellow with the Centre for European Economic Research (ZEW) in Mannheim. She earned her Ph.D. in Economics at the University of Oldenburg, Germany.