Capros P., P. Karadeloglou, L. Mantzos and P. Valette (1991) "CO2 Emission Reduction: Quantitative Analysis for four European Countries"
Paper presented at the International Conference of the Applied Econometrics Association on "International Energy Market Modelling", October 24 and 25, Montpellier, France
The paper quantifies the energy system implications of CO2 related taxes and evaluates their efficiency in CO2 emission reduction for four European countries, namely France, Germany, Italy and the United Kingdom. The analysis presented is limited to a short/medium horizon (1990 to 2005), it concerns only the energy sector and has a single-country view. The approach is introducing "bottom-up" (engineering) information within a top-down analysis. The latter concerns the response of the energy demand sectors to the CO2 taxes, simulated by means of econometric equations. The analysis is based on the results of the MIDAS Energy Model, which is a large-scale model, covering all energy demand and supply sectors and computes the set of energy prices and the energy balance. Process analysis and cost evaluation techniques are used for the formulation of the behaviour of the energy supply sectors. Energy prices, mainly depending on the supply side, influence energy demand and constitute the main convergence variables of the model. The model runs dynamically, at an annual basis. The paper analyses: the main effects of imposing a carbon tax; the dilemma carbon or energy tax; and the role of energy related accommodating policies, regarding investment in energy savings, advanced power generation technology and renewables. The results of two variants of the MIDAS model are presented. These variants differ in the formulation of the electricity sector and one of them computes endogenously future power generation investment, as a result of price-driven merit-order dispatching. The results show that both the energy efficiency investments accompanying the CO2 taxation and the restructuring of power generation, induced by the tax, are the critical factors for the success of CO2 reduction policies.
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"CO2 Emission Reduction: Quantitative Analysis for four European Countries"
