Impact of climate policy on the Basque economy

Mikel González

Spain

Universidad del País Vasco (UPV/EHU)

Fundamentos del Análisis Económico I.

Rob Dellink

Netherlands

Wageningen University

Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands and Environ-mental Economics and Natural Resources group, Wageningen University, Wageningen, The Netherlands.

Submitted: 2016-03-07

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Accepted:

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Published: 2011-10-17

DOI: https://doi.org/10.7201/earn.2006.12.09
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Keywords:

Applied General Equilibrium, Climate change, Tradable pollution permits, Basque Country

Supporting agencies:

Mikel González is grateful to the Environmental Economics and Natural Resources Group (Wageningen University) and to Spanish Ministry of Education for financial support (FPU-ref.-2002-1001).

Abstract:

In this paper analyze the economic effects of CO2 emission reductions in the Basque Country (Spain) using an applied general equilibrium (AGE) model with specific attention to environment-energy-economy interactions. Environmental policy is implemented through a system of tradable pollution permits that the government auctions. The costs of different levels of CO2 abatement are discussed, focusing on the variations of macroeconomic, sectoral and environment-energy variables. Results show that the costs for achieving the Kyoto targets can remain limited if the appropriate combination of changes in fuel-mix and restructuring of the economy is induced.
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