Capital malleability and the macroeconomic costs of climate policy

This paper argues for introducing the role of capital malleability into the analysis of environmental policies. The issue is explored by means of a theoretical model, a numerical analysis and a computable general equilibrium (CGE) model. Considering the three approaches together is fundamental in obtaining theory-compatible policy-relevant results. The model outcomes reveal differences between results under separate assumptions regarding the malleability of capital. When capital is imperfectly malleable a carbon policy is less effective than under the assumption of perfect malleability of capital. Therefore, it is important that, especially for the analysis of short-term environmental regulations, the issue of capital malleability is taken into consideration.

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Year of publication:	2010
Authors:	Lanzi, Elisa ; Sue Wing, Ian
Publisher:	Milano : Fondazione Eni Enrico Mattei (FEEM)
Subject:	Kapital \| Kapitalmobilität \| Klimaschutz \| Umweltabgabe \| Allgemeines Gleichgewicht \| CGE-Modelling \| General Equilibrium \| CGE Models \| Climate Change Policy

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Series:	Nota di Lavoro ; 2010,19
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	640274900 [GVK] hdl:10419/43523 [Handle]
Classification:	C68 - Computable General Equilibrium Models ; D58 - Computable and Other Applied General Equilibrium Models ; H22 - Incidence ; Q43 - Energy and the Macroeconomy
Source:	EconStor

Persistent link: https://www.econbiz.de/10010272461