Transcript 16 April 2009. Brussels

WIOD Conference on Industry-Level Analyses of Globalization and its Consequences
26 May 2010
Global effects of a
European environmental
tax reform
Christine Polzin (SERI)
Dr Christian Lutz (GWS)
Dr Stefan Giljum (SERI)
www.seri.at
Content
1. Background: The PETRE project
2. The GINFORS Model
3. Results
4. Policy recommendations
2
Content
1. Background: The PETRE project
2. The GINFORS Model
3. Results
4. Policy recommendations
3
Resource Productivity, Environmental Tax
Reform and sustainable growth in Europe
What are the global impacts of a
European environmental tax reform?
Environmental
tax reform in
the EU
• Environmental impacts:
•Material extraction
•Energy-related CO2 emissions
•Economic impacts:
•economic growth
•International trade & sectoral
competitiveness
•EU-27
•OECD
•Emerging
economies
•Rest of the
world
http://www.petre.org.uk/
4
Content
1. Background: The PETRE project
2. The GINFORS Model
3. Results
4. Policy recommendations
5
Global INterindustry FORecasting
System (GINFORS)
GINFORS:
•
•
•
•
Economy-energy-environment simulation model
Global multi-country approach
Multi-sector approach
Links modules for bilateral trade, macroeconomic
behaviour, industrial output from IO tables and energy
use and prices
• Includes a global dataset on material extraction
(physical data)
6
Data sources and coverage
model type
country models
trade
data sources
OECD (BTD, 25 sectors,
Services)
global coverage
50 countries (> 95% of
world GDP, trade, energy
consumption)
UN COMTRADE
2 regions (OPEC, ROW)
OECD IO (41 sectors)
input-output
22 countries (more than
OECD STAN, SNA DT
and sector
80% of world GDP)
National sources (CN, TW)
macro
energy/CO2
OECD/IMF
IEA
52 countries
52 countries
material
population
SERI
UN
52 countries
52 countries
7
Country coverage
country models
OPEC ex. Indonesia
ROW
8
Baseline and policy scenarios
Baseline = Business as usual scenario
• Socio-economic and economic-environmental relations
of the past will continue in the future
ETR scenarios
• ETR tax in all EU non-ETS sectors = ETS price
• Aviation included in EU ETS
• 100% auctioning of power generation ETS permits
• 50% auctioning of all other ETS permits in 2013,
100% auctioning by 2020
• Material taxes (5% ad valorem in 2010, 15% by
2020)
9
Policy scenarios
S1H
• High energy prices
• ETR with 100% revenue recycling: all revenues are used to
reduce the employers’ social security contributions (income
tax, etc)
• 2020 EU GHG emissions target (20%) met
S3H
•
•
•
•
•
High energy prices
ETR with 100% revenue recycling
International cooperation
2020 EU GHG target (30%)
Emerging economies introduce a CO2 tax which is recycled
via income tax reductions
10
Content
1. Background: The PETRE project
2. The GINFORS Model
3. Results
4. Policy recommendations
11
GDP continues to grow in all 4 regions
in the baseline scenario
GDP development in the baseline scenario (average annual growth rates)
Average annual
growth rates
19952000
20002005
20052010
20102015
20152020
In % (based on USD PPP, 2004)
EU-27
3.1
1.9
2.2
2.5
2.2
OECD (non-EU)
3.8
2.6
2.0
3.0
2.9
Emerging
Economies
6.2
8.0
8.7
8.3
6.8
RoW
3.8
4.9
5.1
3.7
2.9
World
4.2
4.8
4.4
4.9
4.4
12
Global economic weight will shift away
from the old industrialised countries
Shares in world GDP, baseline scenario
Shares in world
GDP
2000
EU-27
25.4
22.4
20.4
18.4
16.8
OECD (non-EU)
41.3
37.5
33.8
31.2
29.3
Emerging
Economies
27.9
31.4
37.0
42.0
46.0
5.9
9.2
9.5
9.0
8.5
RoW
2005
2010
2015
2020
In % (based on USD PPP, 2004)
13
Global economic growth is only
marginally affected by an ETR
GDP impacts in different world regions. 3 scenarios (in bn USD 2000, PPP)
Total value of Absolute Percentage Absolute Percentage
GDP,
deviation of deviation of deviation of deviation of
baseline (in
HS1 from
HS1 from
HS3 from
HS3 from
billion USD baseline in baseline in baseline in baseline in
2000, PPP)
2020
2020
2020
2020
EU-27
15,931
-92
-0.6
-297
-1.9
OECD (non-EU)
27,840
28
0.1
-78
-0.3
Emerging
Economies
43,699
53
0.1
-688
-1.6
8,033
6
0.1
-266
-3.3
94,926
-3
0.0
-1,313
-1.4
RoW
World total
14
Exports continue to grow in the
baseline scenario
Export developments in different world regions, baseline scenario
Average annual
growth rates
20002005
20052010
20102015
20152020
In % (based on USD, 2000)
EU-27
3.7
3.1
2.6
2.9
OECD (non-EU)
7.7
5.1
3.1
2.5
Emerging
Economies
5.1
9.3
5.4
6.1
RoW
8.7
8.3
5.3
5.8
15
Export impacts are stronger with
global cooperation
Export impacts in different world regions, three scenarios
Total value
Absolute Percentage Absolute Percentage
of exports,
deviation of deviation of deviation of deviation of
baseline,
HS1 from
HS1 from
HS3 from
HS3 from
2020
baseline in baseline in baseline in baseline in
(PPP bn
2020
2020
2020
2020
USD)
EU-27
7972.0
-60.1
-0.8%
-264.2
-3.3%
OECD (non-EU)
5505.1
14.1
0.3%
-29.5
-0.5%
11036.0
19.8
0.2%
-159.2
-1.4%
4913.9
7.4
0.2%
-73.2
-1.5%
Emerging
Economies
RoW
16
Resource-intensive sectors loose out
% deviation from baseline
EU Exports: impacts of scenario SH3
10
5
0
-5
-10
-15
-20
-25
-30
17
Continuous trend of increasing
global resource extraction
billion tonnes
Global used material extraction of different material categories, baseline
120
Construction minerals
Industrial minerals
Non-ferrous metals
100
Iron ores
Natural Gas
Crude Oil
Coal
80
Forestry products
Agricultural products and fish
60
40
20
0
2000
2005
2010
2015
2020
2025
2030
18
Material extraction continues to grow
billion tonnes
Global used material extraction, 3 scenarios
85
80
75
70
Baseline
65
S1H
S3H
60
55
50
2000
2005
2010
2015
2020
19
A European ETR and global cooperation
can decrease material extraction
Total
Absolute
extraction,
deviation of
baseline,
S1H in 2020
2020
(in billion
(in billion
tonnes)
tonnes)
EU-25
Percentage
deviation of
S1H from
baseline in
2020
Absolute
deviation of
S3H in 2020
(in billion
tonnes)
Percentage
deviation of
S3H from
baseline in
2020
6.8
-0.10
-1.47 %
-0.24
-3.6 %
OECD
(non-EU)
18.7
0.02
0.10 %
-1.03
-5.5 %
Emerging
Economies
31.5
0.01
0.03 %
-2.23
-7.1 %
RoW
24.2
-0.02
-0.08 %
-0.79
-3.3 %
Global
81.2
-0.09
-0.11 %
-4.30
-5.3 %
20
CO2 emissions remain constant in the
EU but increase elsewhere
billion tonnes
Energy-related CO2 emissions in 4 regions, baseline (bn tonnes)
45
40
35
30
25
RoW
Emerging Economies
20
OECD (non-EU)
EU-27
15
10
5
0
2000
2005
2010
2015
2020
2025
2030
21
billion tonnes
Global CO2 emissions can hardly be
reduced with EU measures alone
36
34
32
30
Baseline
S1H
28
S3H
26
24
22
2000
2005
2010
2015
2020
22
CO2 emissions can be substantially
reduced with global cooperation
Impacts of an ETR on energy-related CO2 emissions in HS1 and HS3
Total CO2
Total
emissions in change in
baseline, HS1 in 2020
2020 (in Mt)
(in Mt)
EU-25
Relative
change in
HS1, % in
2020
Total
change in
HS3 in 2020
(in Mt)
Relative
change in
HS3, % in
2020
3776.3
-318.8
-8.4 %
-722.4
-19.1 %
OECD
(non-EU)
10244.6
10.4
0.1 %
-1829.1
-17.9 %
Emerging
Economies
14835.5
2.3
0.02 %
-2741.9
-18.5 %
5854.9
0.4
0.01 %
-141.4
-2.4 %
34526.7
-272.8
-0.8 %
-5398.6
-15.6 %
RoW
Global
23
Content
1. Background: The PETRE project
2. The GINFORS Model
3. Results
4. Policy recommendations
24
Combating climate change with global
cooperation and global climate treaties
• Large emerging economies will increase their share in CO2
emissions
• Unilateral action by the EU is insignificant in terms of global
environmental sustainability
• Participation of all OECD and emerging countries
• Avoid carbon leakage
25
CO2 emission targets are not
sufficient to address climate change
•
Targets to reduce EU CO2 emissions (by 20-30%) are not
sufficient.
•
Measures are needed to increase resource productivity and to
limit resource consumption.
•
Focus on CO2 is too narrow (e.g. biofuels, nuclear energy)
•
Address our unsustainable use of resources (root cause of
climate change)
•
Concerted action
26
Shared responsibility between
producers and consumers
•
Increasing importance of embodied emissions in trade
•
Multi-regional IO models show that our CO2 emissions would
be higher (developing countries produce on our behalf)
•
Distribute costs to reduce GHG emissions between producers
and consumers
•
Per capita allocations or global carbon tax
27
Address the conflict between
economic and development goals
•
In important EU policy strategies (“Global Europe”, “Raw
Materials Initiative”) the goals of access to and supply of raw
materials and natural resources prevail over the objective of
their sustainable and equitable use
•
Increase technical and financial assistance for climate change
mitigation and adaptation
•
Placing access to resource efficient technologies outside the
purview if IPR restrictions into the public domain / international
public buyouts of patents on such technologies
28
Thank you!
www.seri.at
www.gws-os.de
www.materialflows.net
[email protected]
[email protected]
[email protected]
29
Scenarios
Baseline with low energy prices (LEP) LB:
• International energy prices: PRIMES 2007 (60 $2005/boe in 2020)
• GDP and CO2 adjusted to PRIMES 2007/WEO 2007
• ETS price: 18 Euro2008/t CO2 in 2020
Baseline HB:
• Baseline as above but exogenous real oil price is assumed to rise after
2008 consistent with a $113/boe in nominal terms in 2010 and then to rise
as in the PRIMES baseline (LEP above).
• Gas and coal prices follow the oil price.
• Energy prices consistent with IEA/WEO 2008 baseline
Scenario 1: LS1
• 2020 EU GHG emissions target (20%) met
• Low energy prices (baseline LEP)
• ETS price = ETR tax rate
• ETS: 100% auctioning in 2020
• Material tax (15% ad valorem tax in 2020)
• 100% revenue recycling: employer’s social security contributions (ETS
material tax and carbon tax on corp. rev)/income tax (carbon tax on hh)
• No further policy measures (RES, efficiency package etc.)
30
Scenarios (part II)
Scenario 2: HS1
• 2020 EU GHG 20% target met
• High energy prices
• CO2 price: 68 Euro 2008/t
Scenario 3: HS2
• As Scenario 2
• 10% recycling in low carbon technologies
(RES and building insulation)
• CO2 price: 61 Euro 2008/t
Scenario 4: HS3
• As Scenario 2
• International cooperation
• 2020 EU GHG emissions target (30%!) met
• CO2 price: 184 Euro2008/t (OECD)
• CO2 price: 46 Euro2008/t (emerging economies)
31