Non-energy Goods Research Articles

Production-based versus consumption-based emission targets: implications for developing and developed economies

AbstractThis paper evaluates how the marginal abatement cost (MAC) and the efficiency cost of policies will change at the regional and global level if reduction targets are based on consumption-based emissions (CBEs) rather than on production-based emissions (PBEs). Using a CGE model, this paper finds that the MAC of CBEs is in general higher than that of PBEs, mainly due to limited substitution possibilities between energy and non-energy goods in final consumption compared to those in the choice of inputs in production activities under PBEs. Interestingly, when policies such as border carbon adjustments (BCAs) are introduced to reduce CBEs, net importers of emissions are better off, while net exporters of emissions are worse off in this approach compared to the PBEs target. If border tariffs are not allowed, the CBEs target turns out to be worse both for net importers and exporters of emissions.

Energy-saving Technology Adoption under Uncertainty in the Residential Sector

Home renovation is generally asserted to be a highly effective means for households to lower expenditures on energy. In this sense, home renovation can also be thought as a means to reduce GHG emissions. In this paper we consider a homeowner who makes an irreversible energy-efficiency investment in an uncertain environment. In a general equilibrium framework, we solve the program of a representative consumer who uses his wealth to invest in the energy-saving technology, to save or to consume energy goods and non-energy goods. Resolution is analytical in a zero discounting case and numerical for the general case, based on collocation and Chebychev polynomials. In particular, we show that the threshold triggering adoption depends not only on technological parameters but on preference parameters as well. Moreover, we show that uncertainty does not affect adoption in the same way as in a partial equilibrium framework.

Carbon tax under the Clean Development Mechanism: a unique approach for reducing greenhouse gas emissions in developing countries

This study examines the economic and environmental implications of a unique Clean Development Mechanism (CDM) scheme in which a non-Annex B country (Thailand) introduces a carbon tax and exports the resulting emission mitigation as certified emission reductions (CERs). A general equilibrium model for Thailand has been developed for analysing this carbon tax-cum-CDM (CT-CDM) policy. The study finds that, unlike a carbon tax policy, the CT-CDM policy could increase economic welfare in Thailand, depending on CER price and schemes of recycling carbon tax- and CERrevenue to the economy. The CT-CDM policy is found to increase economic welfare at a very low CER price (<US$2/tCO2) if the revenue from the carbon tax and CER exports is recycled to finance cuts in existing indirect taxes on nonenergy goods. The policy would also improve economic welfare when the revenue is recycled to households through a lump-sum transfer or when it is used to finance cuts in existing labour tax, but only at a relatively high CER price (i.e. >US$55/tCO2).

Rapidly Rising Energy Prices: Does the Driver of the Energy Market Imbalance Matter?

This paper uses a variant of the IMF's Global Economy Model (GEM) to examine the macroeconomic impact of the rise in energy prices since the end of 2003 in the Euro Area, the United Kingdom and the United Sates. The analysis illustrates how the impact varies across these countries based on their level of energy use and energy production. In addition, the analysis uses Euro Area simulations to consider how the macroeconomic implications depend on the factors driving higher energy prices. If labour supply or tradable sector productivity increases in emerging Asian economies are an important factor driving energy price increases, then industrial countries receive some positive terms-of-trade effects coming through non-energy tradable goods that offset some of the negative implications of permanently higher real energy prices. The stronger are the industrial countries' trade links with emerging Asia, the larger will be the offsets.

Anticipated economic costs and benefits of ratification of the Kyoto Protocol by the State of Qatar

Abstract Further ratification of the Kyoto Protocol by non-Annex 1 countries such as the State of Qatar will not affect the entrance into force of the Treaty; however, ratification remains an important decision due to other considerations, primarily the economic costs and benefits associated with ratification. As a member of the Organization of Petroleum Exporting Countries (OPEC), Qatar's economic position is closely allied with revenue generated from its oil and natural gas resources. Qatar expects adverse impacts from implementing the Kyoto Protocol, though the estimated magnitude varies enormously with different models. Also, the impacts depend significantly on how the implementation is done; for example, the kind of policies that other countries use. Qatar is able to counter adverse impacts by exploiting its greater share of natural gas and developing energy-intensive industries that produce nonenergy goods such as steel, petrochemicals, and chemicals. Furthermore, it is clear that clauses in the Protocol can be developed to protect OPEC interests, and if Qatar does not ratify the Protocol, it will be excluded from the subsequent rule-making processes. On balance, there are benefits to ratifying the Treaty, and there is also a strong need for extensive further research.

Trade Liberalization and Carbon Leakage

This paper examines the effect of trade liberalization on carbon leakage. We present quantitative estimates of carbon leakage under the Kyoto Protocol with and without freer trade by means of import tariff reductions agreed to in the Uruguay Round of multilateral trade negotiations. We find that under a plausible range of assumptions, the implementation of these import tariff reductions increases the overall rate of leakage, suggesting that previous studies may structurally have underestimated the rate of carbon leakage under the Kyoto Protocol. But we also find that the costs of abating the trade-induced leakage are modest relative to the welfare gains of freer trade. Analysis of the trade-induced carbon leakage shows large differences between leakage caused by reductions of import tariffs on energy goods and by reductions of import tariffs on non-energy goods. It also shows large differences in emission responses among developing country regions.

Resource-based sustainability indicators: Chase County, Kansas, as example

We develop three quantitative indicators of the physical/biological aspect of sustainability. They are based on depletion of resources, dependence on outside subsidies, and disruption of natural cycles. We apply the indicators to an agricultural county in Kansas, using energy, water, soil, and nitrogen as numeraires. 9/10 of Chase County is dedicated to range beef cattle grazing and 1/10 to row-cropping and confinement animal feeding. Range production is relatively non-depleting, independent, and non-disrupting. Cropping is more depleting, dependent, and disrupting, but comparable with that in other agricultural areas. We discuss how this pattern, mediated by absentee land-holding and low human population density, trades off against economic income. With the exception of energy, all analyses are only in terms of direct flows (e.g. actual amounts crossing the county boundary). For energy, we also estimate the energy consumed elsewhere to produce imported non-energy goods and services.

Energy and carbon embodied in the international trade of Brazil: an input–output approach

All goods and services produced in an economy are directly and/or indirectly associated with energy use and, according to the type of fuel utilized, with CO 2 emissions as well. International trade is an important factor in shaping the industrial structure of a country and, consequently, in affecting a country's energy use and CO 2 emissions. This study applies input–output techniques to the Brazilian economy to evaluate the total impacts of international trade on its energy use and CO 2 emissions. A commodity-by-industry IO model in hybrid units (energy commodities in physical units and non-energy commodities in monetary units) is applied to the Brazilian economy in 1995. Results show that total energy embodied in the exports of non-energy goods of Brazil equals 831 PJ, while total carbon embodied is 13.5 MtC. These amounts are larger than the relevant amounts embodied in the imports of non-energy goods, respectively 679 PJ and 9.9 MtC. These figures are better understood by contrasting them with the total energy use and the corresponding total carbon emissions of the Brazilian economy in 1995 estimated by this work: 6781 PJ and 99.4 MtC, respectively. This means that international inflows and outflows of energy embodied in non-energy goods are in the order of 10 and 12% of the total energy use, while inflows and outflows of carbon embodied in non-energy goods are approximately 10 and 14% of the corresponding total carbon emissions of the Brazilian economy in 1995. The general picture is that Brazil is not only a net exporter of energy (153 PJ) and of carbon (3.6 MtC) embodied in the non-energy goods internationally traded by the country in 1995, but also that each dollar earned with exports embodied 40% more energy and 56% more carbon than each dollar spent on imports. These findings suggest that Brazilian policy-makers should be concerned about the extra impacts international trade policy may have on energy use and carbon emissions of the country.

The embodiment of carbon associated with Brazilian imports and exports

National statistics designed to determine domestic greenhouse gas (GHG) emissions usually do not take into account the embodiment of carbon in international trade flows, thus failing to reflect that countries indirectly emit GHG by importing non-energy goods. As a matter of fact, by becoming more services oriented and importing increasing quantities of energy-intensive goods from developing nations, developed nations are transferring part of their carbon emissions to developing economies, with a consequent impact on the global environment. The reduction of carbon emissions in developed nations due to lower energy intensities is of no help for the global warming problem if it is accompanied by increases in carbon emissions in developing nations caused by exports to developed nations. This paper estimates the amount of energy and carbon embodied in the non-energy exports and imports of Brazil for the period 1970–1993 in order to determine whether or not the international trade of carbon rich products is a problem worth addressing in the case of Brazil. The estimates show that the carbon content of exports was considerably higher than that of imports from 1980 on. In 1990 the difference, expressed as a fraction of Brazil's total carbon emissions, was 11.4 percent, or some 8.3 million tonnes of carbon. The significance of these findings for Brazil's future energy and emissions policies is discussed.

Unilateral CO 2 Reductions and Carbon Leakage: The Consequences of International Trade in Oil and Basic Materials

A recursively dynamic general equilibrium model featuring six world regions with trade in energy and non-energy goods is used to simulate the period from 1990 through 2100 in 10-year intervals. The simulations explore the effect of unilateral action by the OECD to curb global CO 2 emissions. Unilateral cuts create incentives for free-riding by non-participating regions, so that global emissions are reduced by less than the amount that the OECD cuts back its regional emissions. Carbon "leakage" occurs through two channels. First, basic materials production increases in unconstrained regions, resulting in increased carbon intensity of GDP. Second, reductions in OECD oil imports cause the world oil price to fall, leading to an increased energy intensity in the non-participant regions. In this paper, we use a general equilibrium model to assess the extent to which these two mechanisms reduce the effectiveness of OECD reductions in curbing global CO 2 concentrations.

Residential demand for energy commodities: A household production function approach

This paper formulates a demand model for energy commodities using a household production function approach. The model is stated in a utility maximization framework where utility is assumed to be a function of two composite commodities directly yielding utility. Electricity and natural gas are used as inputs along with a capital stock to produce one of the utility-yielding commodities. The other utility-yielding commodity is assumed to be produced with two non-energy goods and capital stock which are purchased on the market. The Kuhn-Tucker conditions are then used to characterize the optimal time paths for input purchases and investments by the household.

フィッシュミール製造におけるエネルギー投入量の推定

The input of energy and non-energy goods in the manufacture of fish meal was examined. The amount of these goods was then converted into energy input. The estimated energy input for fish meal manufacture was 1, 600-2, 300 kcal per kilogram of product. Since this value is one half or one third of that for the production of starch or its related products, it can be said that fish meal plant is less energy intensive than other food processing plants. The total energy input, which is the sum of energy input in catching process and that in manufacturing process, was also estimated to be 4, 000-17, 000 kcal per kilogram of product. This result indicates that the fish meal made of sardine captured near Japan is more energy intensive than the maize which is transported for a long distance from USA as a principal constituent of assorted feed.