Carbon policy and economy Modelling framework Scenarios Results Summary
Economic Impacts of Carbon Reduction Policies
Maksym Chepeliev
Institute for Economics and Forecasting, Ukrainian NAS
May 19, 2015
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Carbon policy and economy Modelling framework Scenarios Results Summary
Outline
1 Carbon policy and economy
2 Modelling framework
3 Investigated scenarios
4 Modelling results
5 Summary
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Carbon policy and economy Modelling framework Scenarios Results Summary
E�ects of carbon tax on labor, investments and output:common view
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Carbon policy and economy Modelling framework Scenarios Results Summary
Multiple dividends of carbon policies
Key drivers:
Revenue redistribution approach.
The time frame of analysis.
Climate and health bene�ts.
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Carbon policy and economy Modelling framework Scenarios Results Summary
What is CGE model?
Computable general equilibrium (CGE) is a modelling framework
that includes:
producers that are maximizing pro�ts and minimizing costs;
households that are maximizing utility by choosing
consumption volumes based on price signals;
markets, which balance supply and demand for each product;
other economic agents: Government, investors, security funds
etc.
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Carbon policy and economy Modelling framework Scenarios Results Summary
CGE model for Ukraine: key features
Recursive-dynamic.
Has updated base year 2015.
Includes multiple (structural) benchmark scenarios to the year2050.Incorporates heterogeneous households di�erentiated byincome level (10 groups).
Producers are disaggregated into 40 economic activities.
Has separate treatment of Government budget, Retirementfund and di�erent Social security funds.
Special representation of energy subsidies.
Maksym Chepeliev �Preparedness for Emissions Trading in the EBRD Region� (PETER) Workshop
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Carbon policy and economy Modelling framework Scenarios Results Summary
CGE model for Ukraine: circular �ow
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Carbon policy and economy Modelling framework Scenarios Results Summary
Simulation procedure
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Carbon policy and economy Modelling framework Scenarios Results Summary
Benchmark macroeconomic assumptions
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Carbon policy and economy Modelling framework Scenarios Results Summary
Carbon policy scenario
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Carbon policy and economy Modelling framework Scenarios Results Summary
Macroeconomic e�ects
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Carbon policy and economy Modelling framework Scenarios Results Summary
Sectoral e�ects
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Carbon policy and economy Modelling framework Scenarios Results Summary
Additional scenario (no technological change)
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Carbon policy and economy Modelling framework Scenarios Results Summary
Summary
Key role of technological changes.
E�ciency of proposed redistribution scheme.
Structural shifts in the national economy.
Residential energy saving and e�ciency.
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Carbon policy and economy Modelling framework Scenarios Results Summary
Thank you!
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