Extent:
1 Online-Ressource (12 Seiten; 2140 KB)
Series:
CEPA discussion papers. - Potsdam : Center for Economic Policy Analysis, University of Potsdam, ISSN 2628-653X, ZDB-ID 2969685-9. - Vol. no. 51 (September 2022)
Type of publication: Book / Working Paper
Type of publication (narrower categories): Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language: English
Notes:
Prices of primary energy commodities display marked fluctuations over time. Market-based climate policy instruments (e.g., emissions pricing) create incentives to reduce energy consumption by increasing the user cost of fossil energy. This raises the question of whether climate policy should respond to fluctuations in fossil energy prices? We study this question within an environmental dynamic stochastic general equilibrium (E-DSGE) model calibrated on the German economy. Our results indicate that the welfare implications of dynamic emissions pricing crucially depend on how the revenues are used. When revenues are fully absorbed, a reduction in emissions prices stabilizes the economy in response to energy price shocks. However, when revenues are at least partially recycled, a stable emissions price improves overall welfare. This result is robust to different modeling assumptions.
Other identifiers:
10.25932/publishup-56104 [DOI]
Source:
ECONIS - Online Catalogue of the ZBW
Persistent link: https://www.econbiz.de/10013375503
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