CO2 Abatement and Economic Structural Change in the European Internal Market

1 Introduction.- 1.1 CO2 Abatement, Structural Change and the European Internal Market.- 1.2 Aims and Scope of the Study.- 1.3 Methodological Approach.- 1.4 Overview.- I: Models and Assumptions.- 2 LEAN.- 2.1 Overview.- 2.2 Market Clearance and Macro Closure.- 2.3 Foreign Trade and Final Demand.- 2.4 Factor Demand.- 2.5 Prices and Taxes.- 2.6 Capital Formation.- 2.7 Functional Forms.- 3 EIREM.- 3.1 Overview.- 3.2 Objective Function.- 3.3 Cost Equations.- 3.4 Demand Restrictions.- 3.5 Capacity Restrictions.- 3.6 Fuel Input and Generation Restrictions.- 3.7 Interregional Transmission Constraints.- 3.8 Environmental Taxes.- 4 NEWAGE.- 4.1 Overview.- 4.2 General Equilibrium and the Complementarity Format.- 4.3 Integration of Activity Analysis into AGE Models.- 4.4 Algebraic Summary.- 4.4.1 Exhaustion of Product Conditions.- 4.4.2 Market Clearance.- 4.4.3 Income and Aggregate Demand.- 4.4.4 Activity Analysis Representation of the Electricity Sector.- 5 Parametric Framework and Policy Scenarios.- 5.1 Parametric Framework.- 5.1.1 Regional, Sectoral and Technological Disaggregation.- 5.1.2 Benchmark Data and Elasticities for LEAN and NEWAGE.- 5.1.3 Characterization of Technologies in EIREM and NEWAGE.- 5.1.4 Exogenous Drivers.- 5.2 Initial Economic Situation and Scenario Definitions.- 5.2.1 Initial Situation.- 5.2.2 Policy Scenarios.- II: Simulation Results.- 6 Effects of Market Opening and National Energy Policies.- 6.1 Introduction.- 6.2 The Base Case.- 6.3 Internal Market for Electricity.- 6.4 Nuclear Phase-Out in Germany.- 6.5 Conclusions.- 7 Effects of Carbon/Energy Taxes.- 7.1 Introduction.- 7.2 European Carbon/Energy Tax.- 7.3 National Carbon/Energy Tax in Germany.- 7.4 Alternative Tax Recycling.- 7.5 Conclusions.- 8 Tradeable CO2 Permits.- 8.1 Introduction.- 8.2 Basic Considerations for Welfare Analysis.- 8.3 Empirical Results for Non-coordinated Emission Abatement.- 8.4 Empirical Results for Coordinated Emission Abatement.- 8.5 Conclusions.- III: Summary and Conclusions.- References.- Appendix A: Internal Market for Electricity — Detailed Results.- Appendix B: Nuclear Phase Out in Germany — Detailed Results.- Appendix C: European Carbon/Energy Tax — Detailed Results.- Appendix D: National Carbon/Energy Tax in Germany — Detailed Results.- Appendix E: European Carbon/Energy Tax under Alternative Tax Recycling — Detailed Results.