20
Table 4: Policy variables and relative prices
|
Model without Feedback |
Model with Feedback | |||||||
|
CO2 |
Reduction |
Real |
Terms of |
CO2 |
Reduction |
Real |
Terms of | |
|
(ECU95/ |
% change in 2010 w.r.t. baseline |
(ECU95/ |
% change in 2010 w.r.t. baseline | |||||
|
Austria |
147.5 |
5.79 |
1.71 |
0.58 |
149.5 |
5.93 |
1.78 |
0.59 |
|
Belgium |
24.1 |
2.09 |
1.18 |
0.23 |
24.3 |
2.24 |
1.27 |
0.22 |
|
Germany |
9Γ |
0.63 |
0.35 |
0.30 |
10.6 |
0.78 |
0.44 |
0.29 |
|
Denmark |
64.2 |
3.24 |
1.38 |
0.46 |
64.6 |
3.30 |
1.42 |
0.46 |
|
Finland |
L7^ |
0.11 |
0.25 |
0.11 |
17 |
0.12 |
0.26 |
0.12 |
|
France |
40.0 |
1.88 |
0.93 |
0.00 |
37.8 |
1.81 |
0.93 |
0.00 |
|
Greece |
4.7 |
1.29 |
1.03 |
0.33 |
4^9^ |
1.35 |
1.08 |
0.35 |
|
Ireland |
46.5 |
4.37 |
L95^ |
0.18 |
46.1 |
4.36 |
1.95- |
0.18 |
|
Italy |
166.1 |
11.70 |
5.66 |
0.70 |
166.1 |
11.81 |
5.73 |
0.69 |
|
The Netherlands |
28.2 |
2.13 |
1.08 |
-0.03 |
27.0 |
2.19 |
∏4^ |
-0.04 |
|
Portugal |
13.3 |
1.76 |
ΓT9^^ |
0.08 |
12.8 |
1.82 |
1.25 |
0.07 |
|
Spain |
60.1 |
5.16 |
2.32 |
0.98 |
59.4 |
5.16 |
2.34 |
0.97 |
|
Sweden |
79^ |
0.40 |
0.33 |
0.04 |
8.Ô" |
0.41 |
0.35 |
0.05 |
|
^UK |
12~ |
0.06 |
0.47 |
0.32 |
Ï.5" |
0.11 |
0.52 |
0.34 |
|
"EU |
37.3 |
2.99 |
∏4^ |
1.78 |
40.2 |
3.06 |
1.20 |
1.79 |
Table 4 also presents the terms of trade effect. Previous research indicates that
this is an important element in the explanation of the double dividend that can be
realised by CO2 taxes in the EU (see, for example, de Mooij (1999) and Proost and Van
Regemorter (1998)). However, in our exercise it does not play a major role in
explaining the difference in impacts between the two models, as the terms of trade
effect hardly changes between the two versions of the GEM-E3 model.
Table 5 summarizes the impact of the domestic CO2 taxes on the emissions of
NOx, SO2, VOC and PM at the EU level. The difference between the two models is the
result of the different CO2 reduction targets that are imposed.
For the individual countries the terms of trade are computed relative to all trading partners, whereas for
the EU as a whole the terms of trade are computed relative to outside EU trading partners.