Environmental Economics
Macroeconomic Consequences of Climate
Change, Emissions Trading
Presented by:
Sneha Jain (08023)
Calcutta Business School
Emission Abatement Methodology
•Environmental Regulations
•Quotas on Pollution: tradable emissions permits, which if freely
traded may ensure that reductions in pollution are achieved at
least cost
•Taxes and Tariffs on Pollution/ Removal of Dirty Subsidy
•Emission Tax: is a price instrument which fixes the price while
the emission level is allowed to vary according to economic
activity; green tax shift“
•Renewable Energy Certificate – Green Tag: transferable rights
for renewable energy
Source: OECD Environmental Report 2006-07
Source: OECD Environmental Report 2006-07
Source: OECD Environmental Report 2006-07
Country wise emission of Particulates
Source: OECD Environmental Report 2006-07
Inferences:
•The total emission of CO and CO2 emissions are most
potent across countries
•The per capita emission of CO and CO2 is also the highest
•The total emission/unit of GDP is also highest for this family
of pollutants
•
•A time series analysis shows that the total emission of
pollutants in the US is about 5 times higher than other
developed countries on a year on year basis
Source: OECD Environmental Report 2006-07
Source: OECD Environmental Report 2006-07
Source: OECD Environmental Report 2006-07
Inferences:
•The share of environmental expenditure in the GDP is
falling for all countries under observation
•The revenue generated from abatement taxes as a
percentage of the total revenues is almost constant
•The proportion of revenue from abatement to total
revenue is much higher than the abatement expenditure to
GDP percentage
Carbon Emission Trading
Kyoto Protocol – Divided the world into two halves:
one who can afford making changes to their existing
infrastructure and the ones who cannot
Each tone reduction of CO2, a unit – CER ( Carbon
Emission reduction
[Link] Projects – Clean Development Mechanism
[Link] Trading - Buy credits from the market
Source: Energy Information Administration, US Government
Source: Chicago Climate Exchange
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.693700685
R Square 0.481220641
Adjusted R Square 0.479209868
Standard Error 1.071495827
Observations 260
ANOVA
df SS MS F Significance F
Regression 1 274.76552 274.8 239.321 1.21765E-38
Residual 258 296.2106534 1.148
Total 259 570.9761735
Coefficient Standard t Stat P-value Lower 95% Upper 95% Lower Upper
s Error 95.0% 95.0%
Intercept 0.1586 0.1768 0.897 0.37042-0.1895 0.5067 -0.1895 0.5067
X Variable 1 0.0423 0.0027 15.47 1.2E-38 0.0369 0.0477 0.0369 0.0477
Environmental Kuznet Curve
•U Shaped - clean agrarian economies to polluting industries
to clean service economies
•N Shaped - pollution increases as a country develops,
decreases once the threshold GDP is reached, and then
begins increasing as national income continues to increase.
EKC for Developed Countries-CO2
Source: OECD Environmental Report 2006-07
EKC for Developed Countries-CO2
Source: OECD Environmental Report 2006-07
EKC for Developing Countries-CO2
Source: OECD Environmental Report 2006-07
EKC for Developed Countries-GHG
Source: OECD Environmental Report 2006-07
Result:
For CO2 Emission - Inconclusive
For GHG Emission - Inconclusive
Dr A. Mansur M. Masih, Saudi Aramco Chair Professor of Energy Economics
Department of Finance and Economics, King Fahd University of Petroleum and
Minerals, KSA
Are environmental Kuznets curves misleading us? The case of CO2 emissions -
William R. MOOMAW And GREGORY C. Unruh
The Fletcher School of Law and Diplomacy, Tufts University, Medford, MA 02155, USA
Environmental Kuznet Curve: Empirical Investigation Using Non-parametric Approach
Navin Yavapolkul
Department of Agricultural and resource Economics, University of California, Davis
Environmental Kuznets Curves for Air Pollutant Emissions in Italy: Evidence from
Environmental Accounts (NAMEA) Panel Data
By Mazzanti, Massimiliano; Montini, Anna; Zoboli, Roberto
References:
•The economic impacts of uniform emission abatement - Brian S.
Fisher and Stephen Brown ,ABARE
•The Oil Price Opportunity – Kemal Dervis, 2008
•Marginal Costs of Carbon Dioxide Abatement: Empirical Evidence
from Cross-Country Analysis - DAVID MARADAN And ANATOLI
VASSILIEV, University of Geneva 2005
•OECD Environmental Report 2005, 2006-07
•Environmental Macroeconomics - Basic Principles: Mohan
Munasinghe, 2005
•Estimating the Gains to Emission Trading
•Richard Newell, William Pizer and Jhih-Shyang Shih, December 2003
•
Websites:
•Wikipedia
•Yahoo answers
•Chicago Climate Exchange
•Energy Information Administration, US Government
•Point Carbon News
Thank You