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Paris Environmental and Energy Economics Seminar

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Johannes Emmerling (FEEM) "Spanning the Inequity Simplex across Time, States and Regions"
Abstract :


Global models of the integrated assessment of climate change have stressed the importance of heterogeneity. Moreover, considering uncertainty has been found crucial in the context of climate change. We combine both features and using a disentangled welfare functional across different dimensions and explore theoretical properties of such an approach.
We also present a methodology to incorporate more fine grained regional resolutions of income and damage distributions than typically found in integrated assessment models. Finally, we present quantitative estimates of the Social Cost of Carbon that use our disentangling of different types of inequality aversion using different integrated assessment models.

Fei Teng (Tsinghua University) "Identifying industrial sectors with risk of carbon leakage in China"
Abstract :


China is gradually establishing an Emissions Trading Scheme (ETS) to implement its plan to peak energy-related carbon emissions by 2030. A central debate on ETS design involves addressing the carbon leakage concern. In this study, a detailed quantitative assessment is conducted to identify the industrial sectors at risk of carbon leakage in China. The identification process is undertaken at the four-digit sector level according to the National Economic Industries Classification. Results show that the majority of emissions quotas must be allocated to several energy-intensive sectors. The criterion that focuses on maximum value at stake filters out 27 four-digit sectors, whereas the dual criterion of carbon and trade intensity highlights 17 four-digit sectors that are considered at actual risk of carbon leakage. Quantitative analysis results indicate that allocating 9% of emission quotas for free is sufficient to compensate these vulnerable sectors. The risk of exposure to carbon leakage can vary significantly due to the different levels of data disaggregation, as per the findings from the comparison of carbon intensity data obtained from four-digit sectors belonging to one two-digit sector in the Standard Industry Classification. Therefore, the importance of using high-quality disaggregated data is highlighted in this research. Official criteria for assessing the key indicators of industrial sectors must be designed to accurately evaluate the sectors at risk of carbon leakage.