Carbon Pricing Scheme Research Articles

Who's Going Green and Why? Trends and Determinants of Green Investment

This paper fills a gap in the macroeconomic literature on renewable sources of energy. It offers a definition of investment and analyzes the trends and determinants of this investment over the last decade for 35 advanced and emerging countries. We use a new multi-country historical dataset and find that investment has become a key driver of the energy sector and that its rapid growth is now mostly driven by China. Our econometric results suggest that investment is boosted by economic growth, a sound financial system conducive to low interest rates, and high fuel prices. We also find that some policy interventions, such as the introduction of carbon pricing schemes, or feed-in-tariffs, which require use of green energy, have a positive and significant impact on investment. Other interventions, such as biofuel support, do not appear to be associated with higher investment.

Assessment of Environmental Impacts Embodied in U.S.‐China and U.S.‐India Trade and Related Climate Change Policies

We empirically investigate the GHG emissions embodied in the bilateral trade between the United States and China and the United States and India and their countryspecific and global environmental impacts. In order to address the concerns of “levelplaying-field” and carbon leakage associated with domestic carbon pricing scheme, various border carbon adjustments have been proposed in recent U.S. climate change legislation. Employing GTAP-E model, this study examines how and to what extent the proposed carbon tariffs and export subsidies potentially affect bilateral trade flow, domestic production, and the GHG emissions. Results indicate that carbon tariff effectively alleviates the impact of domestic carbon tax on vulnerable domestic industries and slightly raises their output and GHG emissions. In addition, it is also evident that a combined or full border adjustment policy has bigger impacts than an individual policy.

Sind Umweltzölle ein geeignetes Instrument zur Ermöglichung fairen Wettbewerbs zwischen Ländern mit hohen und geringen Klimaschutzanforderungen?

Abstract Border measures to support unilateral climate policy efforts are being discussed in particular in the EU and the US. The EU has stipulated in its 2008 Directive on the European Emissions Trading Scheme (EU ETS) that in order to address the potential for carbon leakage, an inclusion of importers in the ETS could be a policy option amongst others. A climate policy adjustment at the border could take various forms and it could be motivated in three ways. First, trade measures could be announced as a “stick”, sanctioning those countries who are not willing to cooperate on climate protection. Second, the border adjustment for importers (making them pay at the border according to the carbon they emitted for producing the traded good) or a rebate for exporters for the CO2-price they paid at home, would take away the competitive disadvantage vis-à-vis producers from third countries. Third, and as the flip side of the competitiveness effects, the border adjustment could be motivated from a climate policy point of view: in order to secure the environmental integrity of a domestic carbon pricing scheme, such measures could prevent leakage of emissions (caused by relocation of production, in parts or as a whole). While a strong economic case could be made for preventing leakage and also competitiveness effects from CO2 pricing through a cost adjustment at the border for a few sectors, there is little evidence that trade measures as such help to create international leverage for climate policy cooperation. From a legal point of view the justification of such measures very much depends on their designs and motivations. From a political point of view, the risk of disruptions amongst trade partners is fairly high and this is a major argument for limiting the use of border adjustments altogether.

99/02128 Development of and experience with a new generation of modern coal firing systems in a new high-efficiency combined heat and power station: Kaess, M. et al. Proc. Am. Power Conf., 1998, 60, (2), 626–630

This paper examines flexible operation of solvent-based post-combustion carbon capture (PCC) for the reduction of power plant carbon emissions while minimizing revenue loss due to the reduced power plant electricity output. The study is conducted using a model superstructure enveloping three plants; a power plant, a PCC plant and a solar thermal field where the power plant and PCC plant are operated flexibly under the influence of hourly electricity market and weather conditions. Reduced (surrogate) models for the reboiler duty and auxiliary power requirement for the carbon capture plant are generated and applied to simulate and compare four cases, (A) power plant with PCC, (B) power plant with solar assisted PCC, (C) power plant with PCC and solar repowering – variable net electricity output and (D) power plant with PCC and solar repowering – fixed net electricity output. Such analyses are conducted under dynamic conditions including power plant part-load operation while varying the capture rate to optimize the revenue of the power plant. Each case was simulated with a lower carbon price of $25/tonne-CO2 and a higher price of $50/tonne-CO2. The comparison of cases B–D found that optimal revenue generation for case C can be up to 42% higher than that of solar-assisted PCC (case B). Case C is found to be the most profitable with the lowest carbon emissions intensity and is found to exhibit a constant capture rate for both carbon prices. The optimal revenue for case D is slightly lower than case C for the lower carbon price ($25/tonne-CO2) while it is considerably lower in the higher carbon price ($50/tonne-CO2) scenario. The highest revenue to electricity ratio is found to be for the case where solar repowering is used for power boosting. This study highlights the significant potential of dynamic flexible operation toward deeper reductions in carbon capture costs. This analysis is based on the presence of a carbon pricing scheme currently not present in the Australian market, but which could be realised in the future.