Seminari
18 giugno 2015

Strategic Subsidies for Green Goods


Dove: Venice
Sede:

Fondazione Eni Enrico Mattei
Isola di San Giorgio Maggiore
30124 Venice

***
Video-conference
at FEEM Milan

Come raggiungere: Mappa di Google
Orario dell'evento:


h. 12.00 Seminar

Informazione:

Seminars Office, seminars@feem.it

Speakers:

Carolyn Fischer, Resources for the Future, Gothenburg University, FEEM, and CESifo Research Network

Abstract

WTO agreements discipline the use of subsidies, particularly for upstream manufacturing or exports. Unlike tariff rules, the Subsidies Code lacks exceptions for transboundary externalities like human health or resource conservation, including those related to combatting global climate change. Yet support policies for green goods (like renewable energy) are much more popular internationally than imposing a cost on bads (like carbon taxes). These support policies may encourage downstream consumption (renewable energy deployment) or upstream development and manufacturing of those technologies. The strategic trade literature has devoted little attention to the range of market failures related to green goods. We consider the market for a new environmental good (e.g., an alternative renewable energy technology) that when consumed downstream may provide external benefits (like reduced emissions). The technology is traded internationally, but provided by a limited set of upstream suppliers that may operate in imperfect markets, such as with market power or external scale economies.

We examine the national incentives and global rationales for offering production and consumption subsidies in producer countries, allowing that some of the downstream market may lie in non-regulating third-party countries. While producer countries can benefit from restraints on upstream subsidies, global welfare is higher without them, and market failures imply that optimal subsidies are even higher. We supplement the analysis with numerical simulations of the case of renewable energy, exploring optimal subsidies for the major renewable energy producing and consuming regions.

Keywords: international trade, subsidies, imperfect competition, externalities, emissions leakage

JEL numbers: F13, F18, H21, Q5
One sentence: Trade-distorting subsidies may be under- (not over-) provided by strategic countries when market failures are present.

 

***
This seminar has been jointly organized by FEEM and IEFE, Bocconi University.

Download file
Scarica il file PDF
Download file
Scarica il file PDF
Strategic Subsidies for Green Goods

FEEM Newsletter

Iscriviti per rimanere aggiornato.

I Suoi dati saranno trattati dalla Fondazione Eni Enrico Mattei. – Titolare del trattamento – per ricevere via posta elettronica la newsletter della Fondazione. Il conferimento dell’indirizzo e-mail è necessario alla fornitura del servizio. La invitiamo a consultare la Privacy Policy per ottenere maggiori informazioni a tutela dei Suoi diritti.

Questo Sito utilizza cookie tecnici e analytics, nonché consente l’invio di cookie di profilazione di terze parti.
Chiudendo questo banner o comunque proseguendo la navigazione sul Sito manifesti il tuo consenso all’uso dei cookie. Per ulteriori informazioni e per esprimere scelte selettive in ordine all’uso dei cookie vedi la   Cookie PolicyOk