Modeling Climate Policy Instruments in a Stackelberg Game with ...

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IV CONTENTS 4.2 Input vs. Output Taxation . . . . . . . . . . . . . . . . . . . . . 60 4.2.1 Input Taxation: Resource Tax . . . . . . . . . . . . . . . 62 4.2.2 Output Taxation: Energy Tax . . . . . . . . . . . . . . . 62 4.2.3 Hybrid Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 64 4.2.4 Abatement Subsidy . . . . . . . . . . . . . . . . . . . . . 66 4.2.5 Comparison and Conclusions . . . . . . . . . . . . . . . . 66 4.3 Competition Policy . . . . . . . . . . . . . . . . . . . . . . . . . . 69 4.3.1 Market Power and Resource Conservationism . . . . . . . 69 4.3.2 Taxes to Correct Market Power . . . . . . . . . . . . . . . 71 4.3.3 Mitigation under Market Power . . . . . . . . . . . . . . . 73 4.3.4 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . 76 4.4 Technology Policy . . . . . . . . . . . . . . . . . . . . . . . . . . 76 4.4.1 Learning-by-Doing Spillovers . . . . . . . . . . . . . . . . 76 4.4.2 Public R&D Expenditures . . . . . . . . . . . . . . . . . . 81 4.4.3 Combining LbD and R&D . . . . . . . . . . . . . . . . . . 83 4.4.4 Mitigation Policies under Technological Change . . . . . . 85 5 Concluding Remarks and Reflections 91 A Reformulating the Discrete Optimization Problem 97 B Derivatives of Several Functions 99 B.1 Utility Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 B.2 Nested CES Production Function of Good Producing Sector . . . 99 B.3 CES Production Function of Fossil Energy Sector . . . . . . . . . 99 B.4 Capital Productivity of Resource Extraction . . . . . . . . . . . . 100 B.5 Renewable Energy Sector . . . . . . . . . . . . . . . . . . . . . . 100 C The Stackelberg Leader Optimization Problem 101 D Decomposition Analysis 104 E List of Variables and Parameters 105 E.1 Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 E.2 Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 References 109
LIST OF FIGURES V List of Figures 1 GHG emissions by sector in 2004 . . . . . . . . . . . . . . . . . . 1 2 Macroeconomic model structure . . . . . . . . . . . . . . . . . . . 21 3 Game theoretic structure of the basemodel . . . . . . . . . . . . . 24 4 Parameter setting of Rogner’s curve . . . . . . . . . . . . . . . . 39 5 Parameter setting of ETC . . . . . . . . . . . . . . . . . . . . . . 40 6 Different mitigation goals . . . . . . . . . . . . . . . . . . . . . . 42 7 Impacts of different time horizons (BAU) . . . . . . . . . . . . . 43 8 Impacts of different time horizons (RED) . . . . . . . . . . . . . 44 9 Key flows in BAU and RED (basemodel) . . . . . . . . . . . . . 52 10 Shares of factor input in fossil energy and production sector . . . 53 11 Welfare subject to elasticities of substitution . . . . . . . . . . . 53 12 Resource rent subject to the effective stock size . . . . . . . . . . 57 13 Resource rent subject to elasticities of substitution . . . . . . . . 58 14 Resource profits and tax income for price and quantity policy. . . 60 15 Factor flows in the production chain of the base model. . . . . . 61 16 Share of factor inputs in the fossil energy sector. . . . . . . . . . 62 17 Share of factor inputs in the production sector. . . . . . . . . . . 63 18 Welfare losses of the pure energy tax . . . . . . . . . . . . . . . . 64 19 Distribution of rents and tax income . . . . . . . . . . . . . . . . 67 20 Distribution of functional income . . . . . . . . . . . . . . . . . . 67 21 Income reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 22 Resource extraction with respect to market power . . . . . . . . 70 23 Comparison of perfect competition and resource monopoly . . . . 71 24 Income distribution under market power (BAU) . . . . . . . . . . 72 25 Income distribution under market power (RED) . . . . . . . . . . 74 26 Resource tax under monopoly (RED) . . . . . . . . . . . . . . . . 75 27 Resource extraction under different resource taxes . . . . . . . . 75 28 Impact of LbD on incomes . . . . . . . . . . . . . . . . . . . . . . 78 29 Decomposition analysis of resource extraction under LbD . . . . 79 30 Decomposition analysis of resource extraction under R&D . . . . 82 31 Change of functional income under R&D . . . . . . . . . . . . . . 83 32 Comparison of consumption under LbD and R&D . . . . . . . . 84 33 Comparison of transfer volumes of BAU and RED . . . . . . . . 86 34 Resource tax under several technology and policy options . . . . 87 35 Timing of optimal mitigation under several technology options . 88 36 Functional income distribution . . . . . . . . . . . . . . . . . . . 89 37 Prices in BAU and RED scenario . . . . . . . . . . . . . . . . . . 89 38 Capital allocation across economic sectors . . . . . . . . . . . . . 89
Page 1: Matthias Kalkuhl Modeling Climate P
Page 5: CONTENTS III Contents 1 Introductio
Page 9 and 10: LIST OF ABBREVIATIONS VII List of A
Page 11 and 12: EXECUTIVE SUMMARY IX Executive Summ
Page 13 and 14: 1 “Climate change is a result of
Page 15 and 16: 1.3 Scope of this Thesis 3 a wide p
Page 17 and 18: 5 2 Methods and Economic Theory 2.1
Page 19 and 20: 2.3 Economic Theory and Policy Inst
Page 29 and 30: 2.4 Review of Climate Economic Mode
Page 31 and 32: 2.6 Implications and Challenges 19
Page 33 and 34: 21 3 Model Development and Analysis
Page 35 and 36: 23 Although population growth is an
Page 37 and 38: 3.1 Description of the Basemodel 25
Page 45 and 46: 3.2 Model Extensions 33 3.2 Model E
Page 47 and 48: 3.2 Model Extensions 35 first-stage
Page 49 and 50: 3.2 Model Extensions 37 augments fa
Page 51 and 52: 3.3 Model Calibration 39 Resource S
Page 53 and 54: 3.3 Model Calibration 41 3.3.4 Elas
Page 55 and 56: 3.3 Model Calibration 43 3.5 3 T =
Page 57 and 58:
3.4 Analysis 45 ˜F(K Y , K E , K R
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3.4 Analysis 47 imply lim µ(S −
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3.4 Analysis 49 Ċ = Ẏ − I ˙ (
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3.4 Analysis 51 of Barro and i Mart
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3.4 Analysis 53 Figure 10: Shares o
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55 4 Evaluation of Policy Instrumen
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4.1 Price vs. Quantity Policy 57 Fi
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4.1 Price vs. Quantity Policy 59 To
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4.2 Input vs. Output Taxation 61 Fi
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4.2 Input vs. Output Taxation 65 th
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4.3 Competition Policy 69 should me
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4.3 Competition Policy 71 100 95 Pe
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4.3 Competition Policy 73 equations
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4.3 Competition Policy 75 2.5 2 Mon
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4.4 Technology Policy 77 no tax m e
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4.4 Technology Policy 79 Figure 29:
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4.4 Technology Policy 81 without R&
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4.4 Technology Policy 85 LbD R&D Lb
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4.4 Technology Policy 87 300 250 Ba
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91 5 Concluding Remarks and Reflect
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93 market power, ad-valorem tax pro
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climate policy not only may help to
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97 A Reformulating the Discrete Opt
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99 B Derivatives of Several Functio
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101 C The Stackelberg Leader Optimi
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103 Government C gov =Γ + τ K rK
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105 E List of Variables and Paramet
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E.2 Parameters 107 s elasticity of
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REFERENCES 109 References Abadie, J
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REFERENCES 111 Hanley, N., J. F. Sh
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REFERENCES 113 Pigou, A. C. (1932).
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REFERENCES 115 van der Zwaan, B. C.
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Ehrenwörtliche Erklärung Hiermit
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