2009
MAS 2009 Proceeding
The role of the green quota and revenue recycling schemes in the climate change options: a dynamic general equilibrium analysis for austria
Authors: Stefan Schmelzer , Todor Balabanov
Abstract
By simulations with the dynamic equilibrium model TD-BU-E3 DGEM the long term impacts of two alternative policy instruments for responses to climate change were assessed green quota and double dividend. Electricity demand growth was de-coupled from the economic growth. 3 economic sectors, 5 existing and three new vintage electricity production technologies were considered. By 2050 the share of renewables in the electricity production could be reaching 0,289 and there are sufficient potential renewable resources. The economic burden is bearable and the welfare is growing. Checking the double dividend hypothesis (trade-off b/n environmental benefits and gross economic costs) the reduction in the labor tax is increasing consumption; the reduction of consumption tax to a lesser extent so but the reduction in the lump-sum refund to the representative household is detrimental to consumption. Hence, only for the case of labor tax recycling, we could assume the existence of a strong double dividend.
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