气候政策和经济来自欧洲碳定价倡议的证据

ClimatePolicyandtheEconomy:

EvidencefromEurope’sCarbonPricingInitiatives

DiegoR.K¨anzig

NorthwesternUniversity&NBER

MaximilianKonradt

GenevaGraduateInstitute

IMFERConferenceonTheFutureofMacroeconomicPolicy

June2023

1

Theloomingclimatecrisis

•Climatechangeisnowatthetopoftheglobalpolicyagenda

•Carbonpricingisincreasinglyusedasatooltomitigateclimatechange

•Carbontaxes

•Cap-and-trade

•Weknowlittleabouttheeffectsofthesepoliciesinpractice

•Effectiveatreducingemissions?

•Short-termeconomiccosts?

•Howdodifferentpoliciescompare?

2

Thispaper

•ComprehensiveanalysisofcarbonpricingpoliciesinEurope

•WhyEurope?Globalleaderinclimatepolicywith20+yearsofexperience

•EU-wideemissionstradingscheme(EUETS)

•Manycountriesalsoenactedcarbontaxesatnationallevel

•Sufficientvariationtoidentifytheeffectsofinterest

•Keychallenge:Carbonpricesnotsetinavacuum

•Wecomparetwoempiricalstrategies:

•high-frequencyidentificationand“control-based”approach

•Provideunifiedframeworktostudyimpactofcap-and-tradeprices&carbontaxes

3

Mainresults

•Carbonpricingleadstoemissionreductionbutcomesateconomiccost

•Economiceffectslargerforcarbonmarketthanfornationalcarbontaxes

•Robusttotheidentificationstrategyused

•Inlinewithpreviousevidencein

K¨anzig(2022

)and

MetcalfandStock(forthcoming

)

•Welookintopotentialexplanationsforthisfinding

•Revenuerecycling

•Coverageandpass-through

•Spilloversandleakage

•Monetarypolicy

•

...

Mainresults

4

•Useofcarbonrevenuesturnsouttobecrucial

•Carbontaxesoftenintroducedaspartofbroadertaxreformloweringincometaxes

•Europeancarbonmarkethasnodirectmeasurestocushioneffectsonhouseholds→Carbontaxesthatdonotrecyclerevenuesdisplaystrongereconomiceffects

•Pass-throughandcoveragearealsoveryimportant

•Energysectorcoveredundercarbonmarket,excludedfromcarbontaxes

•Energy,consumerandproducerpricesincreasestronglyafterincreaseinEUETSprice,mutedpriceresponseafterequivalentincreaseinnationalcarbontaxes

•NationalcarbontaxeshavelimitedeffectonEUemissions;potentialcarbonleakage

Bothpoliciescanbesuccessfulatreducingemissionsbutmayhavetobe

complementedwithotherpoliciestocushioneconomicimpactsandpreventleakage

5

Additionalresults

•WeexploretheregionalimpactsoftheEuropeancarbonmarket

•Economicimpactsvarysubstantiallyby

1.Shareoffreeallowances

2.Concentrationofelectricitymarkets

•SouthernEuropeancountriesmostaffectedastheyreceiverelativelyfewfreeallowancesandtendtohaveconcentratedelectricitymarkets

•Today’spresentation:focusoncarbontaxversuscap-and-trade

6

Identification

•Carbonpricesareendogenous

•Simultaneity:weakeconomycouldinducegovernmenttoreducecarbonprice

•Confounders:othershockscouldaffectbothcarbonpriceandtheeconomy

•Twoapproachestoidentification

1.High-frequencyapproach:isolateimpactofpolicynewsoncarbonprices,useasIV

2.Control-basedapproach:controlforrelevanteconomicvariablestoisolateplausiblyexogenousvariationincarbonprices

7

High-frequencyidentification

•Idea:Collectrelevantpolicyeventsandlookatresponseofcarbonpricesintightwindowaroundpolicyevents(

K¨anzig,2022

)

Details

•Onlypossibleforcap-and-tradewherewehavehigh-frequencypriceinformation

•Challenge:high-frequencycarbonpolicysurprisesmaybeweakinstrumentsatlowerfrequencies(quarterly/annual)

•ByimposingVARstructure,wecanobtainanestimateofacarbonpolicyshock

•Shockmeasurecanbeaggregatedtothefrequencyofinterest,•Estimatedynamiccausaleffectsusinglocalprojections:

8

Carbonpolicyshocks

Percent

-4-2024

2000200520102015Year

Figure1:CarbonPolicyShocksintheEuropeanCarbonMarket

⇒instrumentbycarbonpolicyshockasrobustnesscheck

9

Control-basedidentification

•Idea:Controlforeconomicandfinancialvariablestoisolatesomeplausiblyexogenousvariationincarbonprices(

MetcalfandStock,forthcoming

)

•e.g.drivenbychangesinpoliticalpreferencesforambitiousenvironmentalpolicies,internationalclimatepolicypressure,orhistoricallylegislatedschedules

•EstimatedynamiccausaleffectsofETSpriceandcarbontaxusinglocalprojections:

Challenges:

•ForcarbonmarketmostvariationatEUlevel:cannotcontrolfortimeFE⇒forcarbontaxesweincludetimeFE,resultswithcontrolsverysimilar

•ETSpricesaremarketpricesandthusendogeneitybiggerconcern

showsEuropeancarbontaxes.BothareexpressedineuropermetrictonofCO2equivalent.

10

ETSpriceandcarbontaxrates

EUR/tCO2

0510152025

ETSprice

EUR/tCO2

050100150200

Carbontaxes

2000200520102015

DNKESP

ESTFIN

FRAGBR

IRLISL

LVANOR

POLPRT

SVNSWE

2000200520102015Year

Year

Figure2:CarbonPricesinEurope

Notes:TheleftpanelshowstheEUETSpricesinceitsintroductionin2005.Therightpanel

Notes:Darkandlightshadedareasare68and95percentconfidencebands.11

Percent

-4-20.2.4.6

HICP

01234

Years

Percentagepoints

-20.2.4

Unemploymentrate

01234

Years

RealGDP

Percent

-15-1-50.5

01234

Years

Industrialproduction

Percent

-15-1-50.5

01234

Years

TheeffectsofanEUETSpolicyshock

Percent

HICPenergy

-1012

01234

Years

Percent

-1-50.5

GHGemissions

01234

Years

Figure3:TheEffectsofanEUETSPolicyShock

Notes:Darkandlightshadedareasare68and95percentconfidencebands.12

Percent

-4-20.2.4.6

HICP

01234

Years

Percentagepoints

-20.2.4

Unemploymentrate

01234

Years

RealGDP

Percent

-15-1-50.5

01234

Years

Industrialproduction

Percent

-15-1-50.5

01234

Years

TheeffectsofaninnovationinEUETSprices

Percent

-1012

HICPenergy

01234

Years

Percent

-1-50.5

GHGemissions

01234

Years

Figure4:TheEffectsofaEuroIncreaseinEUETSPrices

13

Environmentalandeconomicimpactofthecarbonmarket

•High-frequencyandcontrol-basedapproachproduceconsistentresults

•Signsandmagnitudesconsistent,inlinewithresultsin

K¨anzig(2022

)

•Butenergypriceincreasemuchmorepersistentundercontrol-basedapproach⇒Differentvariationforidentification

•Instrumentingcarbonpricebycarbonpolicyshocksalsoproducessimilarresults

More

Percent

-4-20.2.4.6

HICP

01234

Years

Percentagepoints

-20.2.4

Unemploymentrate

01234

Years

RealGDP

Percent

-15-1-50.5

01234

Years

Industrialproduction

Percent

-15-1-50.5

01234

Years

TheoveralleffectsofEuropeancarbontaxes

Percent

-1012

HICPenergy

TimeFE

Globalcontrols

01234

Years

Percent

-1-50.5

GHGemissions

01234

Years

14

Figure5:TheEffectsofaEuroIncreaseinEuropeanCarbonTaxesNotes:Darkandlightshadedareasare68and95percentconfidencebands.

Percent

-15-1-50.5

Percent

-4-20.2.4.6

HICP

01234

Years

Percentagepoints

-20.2.4

Unemploymentrate

01234

Years

Industrialproduction

Percent

-15-1-50.5

01234

Years

RealGDP

1

4

3

0

2

Years

...andinNorthernandWesternEurope

Percent

-1012

HICPenergy

01234

Years

Percent

-1-50.5

GHGemissions

01234

Years

Figure6:TheEffectsofaEuroIncreaseinCarbonTaxesinNorthernandWesternEurope

Notes:Darkandlightshadedareasare68and95percentconfidencebands.

SouthernandEasternEurope

15

16

Takingstock

•ETSpricesandcarbontaxesleadtocomparableemissionreductions,buthavevastlydifferenteconomicconsequences

•Whatdrivesthesedifferences?Arecarbontaxesthemoredesirablepolicy?

•Exploredifferentexplanationstoaccountfordifferentialimpacts

1.Revenuerecycling

2.Coverageandpass-through

3.Spilloversandleakage

4.Monetarypolicy

17

Fiscalpolicyandrevenuerecycling

•Theorysuggestthatuseofcarbonrevenuescanbecrucialfortransmissionofcarbonpricing

•Alsorelevantinpractice

•Carbontaxesoftenintroducedaspartofbroadertaxreformloweringincometaxes

•Europeancarbonmarkethasnodirectmeasurestocushioneffectsonhouseholds

•Studyhoweffectsdifferincountriesthatdorecyclecarbonrevenuestocountriesthatdon’t

•Revenuerecycling:Denmark,Finland,NorwayandSweden

Fiscalpolicyandrevenuerecycling

01234

Percent

HICPenergy

Non-revenuerecyclingcountriesRevenuerecyclingcountries

01234

Years

Percent

-50.51

HICP

01234

Years

GHGemissions

Percent

-15-1-50.5

01234

Years

RealGDP

Percent

-2-15-1-50.5

01234

Years

Percentagepoints

-20.246.8

Unemploymentrate

01234

Years

Percent

-3-2-101

Industrialproduction

01234

Years

Figure7:TheRoleofRevenueRecycling

18

Notes:Darkandlightshadedareasare68and95percentconfidencebands.

Fiscalpolicyandrevenuerecycling

19

•Countriesthatdonotrecycletaxrevenuesexperiencestrongereconomiceffects

•Butemissionreductionsarecomparable

⇒Recyclingrevenuesdoesn’toffsetemissionreductionsbutcushionseconomiccosts

20

Coverageandpass-through

•StarkdifferenceinsectoralcoverageofEUETSandcarbontaxes

•Carbonmarketcoverspowersectorandenergy-intensiveindustry

•Pass-throughparticularlystronginpowersector(

FabraandReguant,2014

)

•Carbontaxesmainlyapplytotransportationandremainingindustrialsectors

Coverageandpass-through

21

4

PanelA:EUETS

Percent

-1012

HICPenergy

Percent

-4-20.2.4.6

HICP

01234

01234

Years

Years

Percent

4-202468

Oilprice

Percent

-1012

PPI

01234

-

0123Years

Years

PanelB:Europeancarbontaxes

Percent

-1012

HICPenergy

Percent

-4-20.2.4.6

HICP

01234

Years

01234

Years

Percent

-4-202468

Oilprice

PPI

01234

Percent

-1012

01234

Years

Years

More

Figure8:TheImpactonPrices

Coverageandpass-through

22

•EnergypricesincreasestronglyafterincreaseinEUETSpriceandarepassedontoproducerandconsumerprices

•Priceresponsesmutedafterequivalentincreaseinnationalcarbontaxes

23

Spilloversandleakage

•CarbonmarketisanEU-widepolicy,carbontaxesleviedatnationallevel

•StrongintegrationofEUcountriesmaycushioneconomiceffectsofnationalpolicies

•Nationalcarbontaxpoliciesmaybesubjecttoleakage,particularlyinmanufacturing

•WhatistheimpactonEU-wideemissions?

Spilloversandleakage

•Somesuggestiveevidenceforcarbonleakage

24

PanelA:EUETS

Percent

-1-50.5

TotalGHGemissions

01234

Years

PanelB:Europeancarbontaxes

Percent

-1-50.5

TotalGHGemissions

01234

Years

Figure9:TheEffectonEU-wideGHGemissions

•NationalcarbontaxesdonotleadtoasignificantfallinEU-wideemissions

25

Monetarypolicy

•MonetarypolicycouldalsoplayaroleinaccountingforthedifferenteffectsofEU-wideandnationalcarbonpricingpolicies

•HigherETSpricesleadtohigherEUinflation

⇒monetarypolicyleansagainstthesepressures

•Nationalcarbontaxesnotinflationary(letaloneatEUlevel)⇒nomonetaryresponse

Monetarypolicy

26

PanelA:EUETS

Percentagepoints

-4-20.2.4

Interestrates

Shortrates

Longrates

01234

Years

PanelB:Europeancarbontaxes

Percentagepoints

-4-20.2.4

Interestrates

Shortrates

Longrates

01234

Years

Figure10:TheEffectonInterestRates

•ECBleansagainstinflationarypressureincarbonmarket,nomonetaryresponsetocarbontaxes

27

Conclusion

•NewevidenceontheeffectsofcarbonpricinginEurope

•Policiessuccessfulinreducingemissions,butcomesateconomiccost

•Economiccostscruciallydependoncoverageandrevenueuse

⇒Complementcarbonpricingwithotherpoliciestocushioncostsandpreventleakage

Supplement

27

Thankyou!

Exampleevents

Table1:Regulatoryupdateevents(extract)

Carbonpolicysurprises

whereFt,dissettlementpriceoftheEUAfrontcontractoneventdaydinmonthtandPc-1isthewholesale

electricitypriceonthedaybefore

Back

Percent

-4-20.2.4.6

HICP

01234

Years

Percentagepoints

-20.2.4

Unemploymentrate

01234

Years

RealGDP

Percent

-15-1-50.5

01234

Years

Industrialproduction

Percent

-15-1-50.5

01234

Years

InstrumentingETSprices

Percent

HICPenergy

-1012

01234

Years

GHGemissions

Percent

-1-50.5

01234

Years

Figure11:TheEffectsofaEuroIncreaseinEUETSPrices,IVApproachNotes:Darkandlightshadedareasare68and95percentconfidencebands.

Back

Back

CarbontaxesinEuropeanregions

PanelA:WesternandNorthernEuropePanelB:SouthernandEasternEurope

EUR/tCO2

050100150200

Carbontaxes

EUR/tCO2

050100150200

Carbontaxes

ESP

PRT

POL

SVN

2000200520102015

Year

DNKEST

FINFRA

GBRIRL

ISLLVA

NORSWE

2000200520102015Year

Figure12:CarbonTaxesinEuropeanRegions

Notes:Darkandlightshadedareasare68and95percentconfidencebands.

Back

Percent

-20246

-10123

Percent

HICP

01234

Years

Percentagepoints

Unemploymentrate

-2-1012

01234

Years

Percent

-5051015

Industrialproduction

01234

Years

RealGDP

1234Years

0

EffectinSouthernandEasternEurope

Percent

HICPenergy

0246810

01234

Years

Percent

-50510

GHGemissions

01234

Years

Figure13:TheEffectsofaEuroIncreaseinCarbonTaxesinSouthernandEasternEurope

ETSshocksandoilprices

MIonthsMIonths

Figure14:TheEffectonOilProduction

Back

Regionalimpactofthecarbonmarket

•Untilnowwefocusedontheaverageimpactofcarbonpricing

•HowdotheeffectsoftheEUETSvaryacrossregions?

•Tostudythis,weconsiderdifferentexposurevariabesandincludeaninteractionterminourlocalprojections:

yi,t+h-yi,t-1=α+βhcpst+γhcpst*exposuret0-1+...+εi,t+h

•Considertwomainexposurevariables:

•Shareoffreeallowances

•Concentrationofelectricitymarket

Percent

-1-50.5

GHGemissions

01234

Years

Percentagepoints

-5-4-3-.2-10

Unemploymentrate

01234

Years

Theroleoffreeallowances

Percent

-1-50.5

HICPenergy

01234

Years

Percent

0246.8

RealGDP

01234

Years

Figure15:TheRoleofFreeAllowancesintheEUETS

Theroleofmarketconcentration

GHGemissions

HICPenergy

-20.24.6

-6-4-20.2.4

Percent

Percent

1

4

3

0

2

Years

01234

012.3.4

Percentagepoints

Unemploymentrate

01234

Years

Years

Percent

-6-4-20.2

RealGDP

01234

Years

Figure16:TheroleofMarketConcentrationintheEUETS

SecondquartileFirstquartile

FourthquartileThirdquartile

4