Abstract
This article analyzes the adverse competitive effect of climate policy on domestic supply using industry-level data from forty countries. In accordance with the theoretical literature, we define the competitive effect as the difference between the energy price elasticities of demand and supply; the magnitude of the competitive effect is captured by estimating the supply and demand functions. We find adverse competitive effects for certain country-industry pairs; however, these impacts are small. Additional simulation analysis shows potential for substitution between an imported product and a domestic good in less energy-intensive sectors. The results indicate the importance of considering industrial characteristics when formulating and implementing a climate policy.
Original language | English |
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Pages (from-to) | 150-162 |
Number of pages | 13 |
Journal | Economic Analysis and Policy |
Volume | 48 |
DOIs | |
Publication status | Published - Aug 30 2015 |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Economics, Econometrics and Finance (miscellaneous)