Seminars & webinars
30 May 2013

Limits to Limiting Greenhouse Gases: Intertemporal Leakage, Spatial Leakage, and Negative Leakage


Where: Venice
Location:

Fondazione Eni Enrico Mattei
Isola di San Giorgio Maggiore
30124 Venice

***
Video-conference
at FEEM Milan

How to reach: Google map
Event's Timetable:


h. 12.00 Seminar

Information:

Seminars Office, seminars@feem.it

Speaker:

Carolyn Fischer, Resources for the Future (RFF), Washington

Abstract

Authors: Carolyn Fischer and Stephen W. Salant

This paper contributes to the recent literature on the Green Paradox (Hoel, 2011 and Harstad, 2012) that distinguishes between regulated and unregulated regions in a Hotelling framework. In our model, different grades of oil are characterized by different costs, emission factors, and underground reserves; furthermore, the clean backstop experiences cost-reducing technical change. As a result, even unregulated consumers may switch from fossil fuels to the backstop before exhausting them. Hence, cumulative emissions reductions can occur in this model, and we identify circumstances in which reducing emissions in the regulating coalition also induces reductions among unregulated consumers - "negative leakage." Increasing an emissions tax, increasing the size of the regulated coalition and accelerating backstop cost reductions are policy substitutes for achieving a target emissions reduction. Given the difficulties in securing international cooperation on global warming, promoting technical change in clean energy sources may be a more effective instrument for reducing carbon emissions.

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Limits to Limiting Greenhouse Gases: Intertemporal Leakage, Spatial Leakage, and Negative Leakage (presentation)
Download file
Download PDF file
Limits to Limiting Greenhouse Gases: Intertemporal Leakage, Spatial Leakage, and Negative Leakage (paper)

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