We examine the industrial effects of two measures aimed at mitigating carbon leakage: the EU's scheduled Carbon Border Adjustment Mechanism (CBAM) and the allocation of free emission allowances. Currently, the EU allocates free emission allowances based on output (known as outputbased...

The prevailing literature discusses intergenerational trade-offs predominantly in infinitely-lived agent models despite the finite lifetime of individuals. We discuss these trade-offs in a continuous time OLG framework and relate the results to the infinitely-lived agent setting. We identify...

We examine a global refunding scheme for mitigating climate change. Countries pay an initial fee into a global fund that is invested in long-run assets. In each period, part of the fund is distributed among the participating countries in relation to the emission reductions they have achieved in...

Unilateral CO2 emission reduction can lead to carbon leakage, such as relocation of power-intensive and trade-exposed industries. In the EU emission trading system, these industries are also subjected to higher cost of electricity due to emission pricing in this sector. As a result, the...

Countries with ambitious climate targets are concerned about carbon leakage to countries with more lenient or no carbon pricing. A common policy measure against leakage is output-based allocation of emissions allowances, whose effectiveness could be further enhanced by consumption taxes levied...

The Clean Development Mechanism (CDM) is an offset mechanism designed to reduce the overall cost of implementing a given target for greenhouse gas (GHG) emissions in industrialized Annex B countries of the Kyoto Protocol, by shifting some of the emission reductions to Non-Annex B countries. This...

This paper examines how ambitious climate policies and subsidies to carbon capture may affect international energy prices and market shares in the power market. A detailed numerical model of the international energy markets is used. We first conclude that an ambitious climate policy alone will...

We examine the potential of Carbon Capture and Storage (CCS) technologies in the European electricity markets, assessing whether CCS technologies will reduce carbon emissions substantially in the absence of investment subsidies, and how the availability of CCS technologies may affect electricity...

Asymmetric regulation of a global pollutant between countries can alter the competitiveness of industries and lead to emissions leakage. For most types of pollution, abatement technologies are available for firms to produce with lower emissions. However, the suppliers of those technologies tend...

We study interactions between a "policy bloc's" emissions quota market and an offset market where emissions offsets can be purchased from a non-policy "fringe" of countries (such as for the CDM under the Kyoto Protocol). Policy-bloc firms are assumed to benefit from free quota allocations that...