Modelling international carbon pricing regimes in light of the Paris Agreement

International carbon pricing can lower the costs to achieve the Paris Agreement´s climate goals. Benefits from, and incentives to join international carbon markets differ between regions. This dissertation analyzes the viability of climate coalitions and potentially necessary compensatory measures. It consists of four essays examining different distributional and efficiency-related aspects of international carbon pricing, using the computable general equilibrium model DART.

The first essay analyzes results of 17 economic models, including DART. It focusses on effects of international carbon markets with different regional and sectoral coverage and addresses the cost distribution within individual regions and how it can be made more equitable.

The second paper analyzes results from 7 models, including DART. It focuses on unequal cost distribution among member regions of climate coalitions, and on their incentives to join such coalitions. It examines individual coalitions´ efficiency and the role of the stringency of temperature goals.

In the third essay, a link between the EU and Chinese ETS is examined. The focus lies on welfare effects, which differ strongly between the two regions. Approaches to overcome the unequal benefits from this linkage are analyzed in three sets of scenarios.

The fourth essay analyzes interactions between the EU ETS and the promotion of renewable energies. Different assumptions on producer and consumer flexibility serve as a proxy for non-ETS policies. Both intersectoral and international carbon leakage effects are analyzed.

The dissertation contributes to questions of cost savings through internationally coordinated carbon pricing, incentives to enter into such cooperations, and ways to fairly distribute costs of emission reductions at national, regional, and international levels. In addition, it helps to better understand the interaction of different climate policies.


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