Energy pricing impact on domestic economy under recent climate action

Tomoyuki Sakamoto, Shunsuke Managi

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

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 languageEnglish
Pages (from-to)150-162
Number of pages13
JournalEconomic Analysis and Policy
Volume48
DOIs
Publication statusPublished - Aug 30 2015

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)

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