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The paper is based on research funded by the Norwegian Research Council (grant numbers 235560 and 280393). The Norwegian high-level Green Tax Commission proposes inter alia cost-effective taxes on red meat and increased toll charges on road traffic to reduce greenhouse gas emissions and local air pollution, respectively. Implementation requires support by the public, but the acceptance of such taxes is not known. We have conducted a national survey of the public's acceptance of the two taxes. The survey instrument showed dynamically the reduction in emissions/pollution for each tax level. Despite survey information about the purpose of the taxes, only 25 percent, on average, were in favour of their introduction, the rest did not know, had zero willingness to pay, or opposed the tax. In this respect, preferences for the two taxes are similar. However, on average people are willing to pay approximately 90 percent of the optimal tax for red meat, but only about 25-35 percent of toll charges on road traffic depending on fuel type. Earmarking the tax revenue for environmentally friendly technology increased acceptable tax level, but only for red meat. Earmarking tax revenues for reduced income tax did not increase the acceptable tax level.

With the new rules of the EU ETS, involving cancellation of allowances, cumulative emissions are no longer fixed but depending on the market outcome. Perino (2018) showed that additional abatement effort can reduce cumulative emissions if it occurs within a few years. This article shows that Perino’s result will be reversed, i.e., cumulative emissions increase, if the abatement effort is at a later year, or permanent. Thus, a new green paradox has emerged.

All three authors are affiliated with the Oslo Centre for Research on Environmentally friendly Energy (CREE) and appreciate financial support from the Research Council of Norway through CREE. Unilateral climate policy induces carbon leakage through the relocation of emission-intensive and trade-exposed industries to regions with no or more lenient emission regulation. Both analytical and numerical studies suggest that emission pricing combined with border carbon adjustment is a second-best instrument, and more cost-effective than output-based rebating, in which case domestic output is indirectly subsidized. No country has so far imposed border carbon adjustment, while variants of output-based rebating have been implemented. In this paper we show that combining output-based rebating for emission-intensive and trade-exposed goods with a consumption tax on the same goods can be equivalent with border carbon adjustment. Moreover, we demonstrate that it is welfare improving for a region which has already implemented emission pricing along with outputbased rebating to also introduce such a consumption tax. We conclude that supplementing outputbased rebating with a consumption tax constitutes smart hedging against carbon leakage: Compared to output-based rebating stand-alone it constitutes a robust strategy for improving cost-effectiveness of unilateral climate policy; compared to border carbon adjustment it limits the risks of potentially detrimental trade disputes.

Bør Norge begrense sin oljeutvinning for å motvirke global oppvarming? Hvilke politiske virkemidler bør i så fall brukes? Vi oppsummerer sentrale fagøkonomiske argumenter i denne debatten i lys av de seneste årenes endringer i internasjonale klimapolitiske rammebetingelser, derunder Parisavtalen. Om Norge ønsker å bidra mer til å begrense oppvarmingen enn internasjonale avtaler forplikter oss til, kan redusert oljeutvinning være en kostnadseffektiv måte å gjøre det på. De mest nærliggende virkemidlene vil da være begrenset lisenstildeling og/eller en avgift per utvunnet enhet. Ved å initiere en internasjonal avtale om tilbudsbegrensning blant produsentland, vil norske myndigheter kunne bidra til at Parisavtalens målsettinger realiseres, selv om avtalen i seg selv skulle bli ineffektiv. En produsentlandavtale kan med andre ord virke som en forsikring. Norges forskningsråd 209698

This paper studies the oil market effects of phasing out oil consumption subsidies in the transport sector. Welfare effects in different countries are also examined. We investigate potential feedback mechanisms of oil subsidy removal via lower oil prices in the global oil market, which may stimulate oil consumption in other regions. An intertemporal numerical model of the international oil market is applied, where OPEC-Core producers have market power. The major subsidizers of oil are OPEC countries, and we find that the effects of subsidy removal here are quite pronounced. Consumption of oil in the transport sector of OPEC countries declines significantly. As a result, the global oil price falls slightly, and other regions increase their oil consumption to some degree. Although OPEC consumers are worse off by the subsidy removal, total welfare in OPEC increases due to higher profits from oil production.

In many regions, renewable energy targets are a primary decarbonization policy. Most of the same jurisdictions also subsidize the manufacturing and/or deployment of renewable energy technologies, some being sufficiently aggressive as to engender WTO disputes. We consider a downstream energy-using product produced competitively but not traded across regions, such as electricity or transportation. A renewable energy technology is available, provided by a limited set of upstream suppliers who exercise market power. With multiple market failures (emissions externality and imperfect competition), renewable market share targets as the binding climate policy, and international trade in equipment, the stage is set to examine rationales for green industrial policy. Subsidies may be provided downstream to energy suppliers and/or upstream to technology suppliers; each has tradeoffs. Subsidies can offset underprovision upstream, but they allow dirty generation to expand when the portfolio standard becomes less binding. Downstream subsidies raise all upstream profits and crowd out foreign emissions. Upstream subsidies increase domestic upstream market share but expand emissions globally. In our two-region model, strategic subsidies chosen noncooperatively can be optimal from a global perspective, if both regions value emissions at the global cost of carbon. But if the regions sufficiently undervalue global emissions, restricting the use of upstream subsidies can enhance welfare.

This paper examines the impacts of the EU Emissions Trading System (ETS) on the environmental and economic performance of Norwegian plants. This paper examines the impacts of the EU Emissions Trading System (ETS) on the environmental and economic performance of Norwegian plants. The EU ETS is regarded as the cornerstone climate policy both in the EU and in Norway, but there has been considerable debate regarding its effects due to low quota prices and substantial allocation of free allowances to the manufacturing industry. Both quota prices and allocation rules have changed significantly between the three phases of the ETS. The rich data allow us to investigate potential effects of the ETS on several important aspects of plant behavior. The results indicate a weak tendency of emissions reductions among Norwegian plants in the second phase of the ETS, but not in the other phases. We find no significant effects on emissions intensity in any of the phases, but positive effects on value added and productivity in the second phase. Positive effects on value added and productivity may be due to the large amounts of free allowances, and that plants may have passed on the additional marginal costs to consumers.

Climate effects of unilateral carbon policies are undermined by carbon leakage. To counteract leakage and increase global cost-effectiveness carbon tariffs can be imposed on the emissions embodied in imports from non-regulating regions. We present a theoretical analysis on the economic incentives for emission abatement of producers subjected to carbon tariffs. We quantify the impacts of different carbon tariff designs by an empirically based multi-sector, multi-region CGE model of the global economy. We find that firm-targeted tariffs can deliver much stronger leakage reduction and higher efficiency gains than tariff designs operated at the industry level. In particular, because the exporters are able to reduce their carbon tariffs by adjusting emissions, their competitiveness and the overall welfare of their economies will be less randomly and less adversely affected than in previously studied carbon tariff regimes. This beneficial distributional impact could facilitate a higher degree of legitimacy and legality of carbon tariffs.

Emissions from oil and gas extraction matter for the lifecycle emissions of fossil fuels, and account for significant shares of domestic emissions in many fossil fuel exporting countries. In this study we investigate empirically the driving forces behind CO2-emission intensities of Norwegian oil and gas extraction, using detailed field-specific data that cover all Norwegian oil and gas activity. We find that emissions per unit extraction increase significantly as a field's extraction declines. Moreover, emission intensities increase significantly with a field's share of oil in total oil and gas reserves. We also find some indication that oil and CO2-prices may have influenced emission intensities on the Norwegian continental shelf.

Forlagets e-utgave er tilgjengelig fra www.magma.no Utslipp av klimagasser er et globalt problem. Fra et globalt, samfunnsøkonomisk perspektiv ville en optimal løsning være en global avtale som på ett eller annet vis gjorde at utslippene ble redusert tilstrekkelig mye og på billigst mulig måte. I denne artikkelen forklarer vi hvorfor en slik løsning er svært vanskelig å få til, blant annet på grunn av gratispassasjerproblemet. I mangel av en slik avtale er det vanskelig for et lite land som Norge å vite hva som er hensiktsmessig å gjøre. I denne artikkelen diskuterer vi virkninger av forskjellige unilaterale norske klimatiltak i et globalt perspektiv. Vi deler denne diskusjonen i to. I den første delen ser vi på effekten av tiltak gitt andre lands utslipp og klimatiltak. Vi diskuterer effekter av avgifter og kvoter, teknologitiltak og reduksjon av produksjon av fossile brensler i Norge. Vi ser også på direkte tiltak i andre land slik som skogvern. I den andre delen ser vi på effekter av norske klimatiltak på andre lands utslipp og insentiver til å delta i bindende, internasjonale avtaler. Med andre ord stiller vi oss spørsmålet om det er grunn til å tro at norsk klimapolitikk kan innvirke på andre lands utslipp og internasjonal klimapolitikk. 1, OA

Unilateral climate policy induces carbon leakage through the relocation of emission-intensive and trade-exposed industries to regions with no or more lenient emission regulation. Both analytical and numerical studies suggest that emission pricing combined with border carbon adjustments may be a second-best instrument, and more cost-effective than output-based rebating, in which case domestic output is indirectly subsidized. No countries have so far imposed border carbon adjustments, while variants of output-based rebating have been implemented. In this paper we demonstrate that it is welfare improving for a region who has already implemented emission pricing along with output-based rebating for emission-intensive and trade-exposed goods to also introduce a consumption tax on these goods. Moreover, we show that combining output-based rebating with a consumption tax can be equivalent with border carbon adjustments.

Knowledge about rig markets is crucial for understanding the global oil market. In this paper we first develop a simple bargaining model for rig markets. Knowledge about rig markets is crucial for understanding the global oil market. In this paper we first develop a simple bargaining model for rig markets. Then we examine empirically the most important drivers for rig rate formation of floaters operating at the Norwegian Continental Shelf in the period 1991q4 to 2013q4. We use reduced form time series models with two equations and report conditional point and bootstrapped interval forecasts for rig rates and capacity utilization. We then consider two alternative simulations to examine how the oil price and remaining petroleum reserves influence rig rate formation of floaters. In the first alternative simulation we assume a relatively high crude oil price equal to 100 USD (2010) per barrel for the entire forecast period, whereas the reference case features the actual oil price with extrapolated values for the last quarters in the forecast period. According to our results, the rig rates will be about 34 percent higher in 2016q4 with the higher oil price. In the second alternative simulation we explore the effects of opening the Barents Sea and areas around Jan Mayen for petroleum activity. This contributes to dampening the fall in the rig rates and capacity utilization over the last part of the forecast period.

We investigate how carbon taxes combined with output-based rebating (OBR) in an open economy perform in interaction with the carbon policies of a large neighboring trading partner. Analytical results suggest that whether the purpose of the OBR policy is to compensate firms for carbon tax burdens or to maximize welfare (accounting for global emission reductions), the second-best OBR rate should be positive in most cases. Further, it should fall with the introduction of carbon taxation in the neighboring country, particularly if the neighbor refrains from OBR. Numerical simulations for Canada with the US as the neighboring trading partner, indicates that the impact of US policies on the second-best OBR rate will depend crucially on the purpose of the domestic OBR policies. If the aim is to restore the competitiveness of domestic emission-intensive, trade exposed (EITE) firms at the same level as before the introduction of its own carbon taxation for a given US carbon policy, we find that the domestic optimal OBR rates are relatively insensitive to the foreign carbon policies. If the aim is to compensate the firms for actions taken by the US following a Canadian carbon tax, the necessary domestic OBR rates will be lower if also the US regulates its emissions, particularly if the US refrains from OBR. If the goal is rather to increase the efficiency of Canadian policies in an economy-wide sense by accounting for carbon leakage, the US policies have but a minor reducing impact on domestic optimal OBR rates.

We study the interactions between fuel efficiency improvements in the transport sector and the oil market, where the efficiency improvements are policy-induced in certain regions of the world We are especially interested in feedback mechanisms of fuel efficiency such as the rebound effect, carbon leakages and the “green paradox”, but also the distributional effects via oil price changes for different regions, sectors and oil producers. An intertemporal numerical model of the international oil market is introduced, where OPEC-Core producers have market power. We find that the rebound effect has a noticeable effect on the transport sector, but also on other sectors through lower oil prices in the regions that introduce the policy. There is a small green paradox effect in the sense that oil consumption increases initially when the fuel efficiency measures are gradually implemented. Finally, there will be significant carbon leakages if the policy is not implemented in all regions, with leakage rates of 35 per cent or higher. Non-OPEC producers will suffer more than OPEC producers by fuel efficiency policies due to high production costs.

We investigate how carbon taxes combined with output-based rebating (OBR) in an open economy perform in interaction with the carbon policies of a large neighboring trading partner. Analytical results suggest that whether the purpose of the OBR policy is to compensate firms for carbon tax burdens or to maximize welfare (accounting for global emission reductions), the second-best OBR rate should be positive in most cases. Further, it should fall with the introduction of carbon taxation in the neighboring country, particularly if the neighbor refrains from OBR. Numerical simulations for Canada with the US as the neighboring trading partner, indicates that the impact of US policies on the second-best OBR rate will depend crucially on the purpose of the domestic OBR policies. If the aim is to restore the competitiveness of domestic emission-intensive, trade exposed (EITE) firms at the same level as before the introduction of its own carbon taxation for a given US carbon policy, we find that the domestic optimal OBR rates are relatively insensitive to the foreign carbon policies. If the aim is to compensate the firms for actions taken by the US following a Canadian carbon tax, the necessary domestic OBR rates will be lower if also the US regulates its emissions, particularly if the US refrains from OBR. If the goal is rather to increase the efficiency of Canadian policies in an economy-wide sense by accounting for carbon leakage, the US policies have but a minor reducing impact on domestic optimal OBR rates.

We consider an international emissions trading scheme with partial sectoral and regional coverage. Sectoral and regional expansion of the trading scheme is beneficial in aggregate, but not necessarily for individual countries. We simulate international CO2 emission quota markets using marginal abatement cost functions and the Copenhagen 2020 climate policy targets for selected countries that strategically allocate emissions in a bid to manipulate the quota price. Quota exporters and importers generally have conflicting interests about admitting more countries to the trading coalition, and our results indicate that some countries may lose substantially when the coalition expands in terms of new countries. For a given coalition, expanding sectoral coverage makes most countries better off, but some countries (notably the USA and Russia) may lose out due to loss of strategic advantages. In general, exporters tend to have stronger strategic power than importers.

Asymmetric regulation of a global pollutant between countries can alter the competitiveness of industries and lead to emissions leakage, which hampers countries’ welfare. In order to limit leakage, governments consider supporting domestic trade exposed firms by subsidizing their investments in abatement technology. The suppliers of such technologies tend to be less than perfectly competitive, particularly when both emissions regulations and advanced tech-nologies are new. In this context of twin market failures, we consider the relative effects and desirability of subsidies for abatement technology. We find a more robust recommendation for upstream subsidies than for downstream subsidies. Downstream subsidies tend to increase global abatement technology prices, reduce pollution abatement abroad and increase emission leakage. On the contrary, upstream subsidies reduce abatement technology prices, and hence also emissions leakage. Moreover, as opposed to downstream subsidies, they provide domestic abatement technology firms with a strategic advantage.

In absence of joint global action, many jurisdictions take unilateral steps to reduce carbon emissions, and the usual strategy is to restrict domestic demand for fossil fuels. The impact on global emissions of such demand side policies is found by accounting for carbon leakage, i.e. changes in emissions abroad induced by the domestic action. Another domestic option for fossil fuel producers, that is yet not well explored, is to reduce own supply of fossil fuels, again accounting for leakages. We explore analytically and numerically how domestic demand and supply side policies affect global emissions, contingent on market behaviour in the fossil fuel markets. Next, we combine this with costs of demand- and supply side policies to find the cost-effective combination of the two types of policies. Norway is the case in our numerical analysis. Our results indicate that given a desire for domestic action and a care for global emissions, the majority of emission reductions should come through supply side measures, i.e., by downscaling Norwegian oil extraction.

We investigate how carbon taxes combined with output-based rebating (OBR) in an open economy perform in interaction with the carbon policies of a large neighboring trading partner. Analytical results suggest that whether the purpose of the OBR policy is to compensate firms for carbon tax burdens or to maximize welfare (accounting for global emission reductions), the second-best OBR rate should be positive in most cases. Further, it should fall with the introduction of carbon taxation in the neighboring country, particularly if the neighbor refrains from OBR. Numerical simulations for Canada with the US as the neighboring trading partner, indicates that the impact of US policies on the second-best OBR rate will depend crucially on the purpose of the domestic OBR policies. If the aim is to restore the competitiveness of domestic emission-intensive, trade exposed (EITE) firms at the same level as before the introduction of its own carbon taxation for a given US carbon policy, we find that the domestic optimal OBR rates are relatively insensitive to the foreign carbon policies. If the aim is to compensate the firms for actions taken by the US following a Canadian carbon tax, the necessary domestic OBR rates will be lower if also the US regulates its emissions, particularly if the US refrains from OBR. If the goal is rather to increase the efficiency of Canadian policies in an economy-wide sense by accounting for carbon leakage, the US policies have but a minor reducing impact on domestic optimal OBR rates. Research Council of Norway University of Oslo European Community’s Seventh Framework Programme (FP7/2007-2013) (grant agreement No 270089) Stiftung Mercator (ZentraClim)

In a non-renewable resource market with imperfect competition, both the resource rent and current prices influence a large resource owner’s optimal supply. New information regarding future market conditions that affect the resource rent will consequently impact current supply. Bleaker demand prospects tend to accelerate resource extraction. A more pessimistic outlook for future demand may, however, slow down the early resource extraction of producers with sufficiently large resource stocks and thus more limited resource rent, because the supply from these producers is driven more by current market considerations than by changes in the resource rent. As producers with relatively smaller resource stocks accelerate their supply in response to bleaker demand prospects, producers with sufficiently large resource stocks will reduce their current supply. A numerical model of the European gas market illustrates that the effect of the shale gas revolution is an accelerated supply by most gas producers, but a reduced supply by Russia who loses market shares even before the additional gas enters the market.

In the abscence of a global agreement to reduce greenhouse gas emissions, individual countries have introduced national climate policies. Unilateral action involves the risk of relocating emissions to regions without climate regulations, i.e., emission leakage. A major channel for leakage are price changes in the international oil market. Previous studies on leakage have assumed competitive behaviour in this market. Here, we consider alternative assumptions about OPEC's behaviour in order to assess how these affect leakage and costs of unilateral climate policies. Our results based on simulations with a large-scale computable general equilibrium model of the global economy suggest that assumptions on OPEC's behaviour are crucial to the impact assessment of unilateral climate policy measures. We find that leakage through the oil market may become negative when OPEC is perceived as a dominant producer, thereby reducing overall leakage drastically compared to a setting where the oil market is perceived competitive.

Recent contributions have questioned whether biofuels policies actually lead to emissions reductions, and thus lower climate costs. In this paper we make two contributions to the literature. First, we study the market effects of a renewable fuel standard. Opposed to most previous studies we model the supply of fossil fuels taking into account that fossil fuels is a non-renewable resource. Second, we model emissions from land use change explicitly when we evaluate the climate effects of the renewable fuel standard. We find that extraction of fossil fuels most likely will decline initially as a consequence of the standard. Thus, if emissions from biofuels are sufficiently low, the standard will have beneficial climate effects. Furthermore, we find that the standard tends to reduce total fuel (i.e., oil plus biofuels) consumption initially. Hence, even if emissions from biofuels are substantial, climate costs may be reduced. Finally, if only a subset of countries introduce a renewable fuel standard, there will be carbon leakage to the rest of the world. However, climate costs may decline as global extraction of fossil fuels is postponed. Research Council of Norway Swedish research foundation Mistra

Asymmetric regulation of a global pollutant between countries can alter the competitiveness of industries and lead to emissions leakage. For most types of pollution, abatement technologies are available for firms to produce with lower emissions. However, the suppliers of those technologies tend to be less than perfectly competitive, particularly when both emissions regulations and advanced technologies are new. In this context of twin market failures, we consider the relative effects and desirability of subsidies for abatement technology. We find a more robust recommendation for upstream subsidies than for downstream subsidies. Downstream subsidies tend to increase global abatement technology prices, reduce pollution abatement abroad and increase emission leakage. On the contrary, upstream subsidies reduce abatement technology prices, and hence also emissions leakage. Research Council of Norway (Renergi, CREE) Entwined-Mistra.

EUs har brukt en rekke ulike mekanismer for tildeling av gratiskvoter for CO2. Det er kjent at tildeling av kvoter som avhenger av bedriftens beslutninger vil gi insentiver til å endre adferd og dermed økte kostnader i form av redusert velferd. Vi bruker en detaljert numerisk modell for det europeiske energimarkedet til å undersøke hvor store disse effektene kan være. En hovedkonklusjon er at kostnadene ved å nå et bestemt utslippsmål kan øke betydelig, avhengig av hvordan kvotene tildeles. Som vist i denne artikkelen vil effektene av et kvotesystem avhenge av både hvor mye utslippene reduseres og hvordan utslippskvotene tildeles. Enkelte tildelingsmekanismer kan påvirke priser og produksjon i betydelig grad – det gjelder spesielt dersom kvotene tildeles i henhold til hvor mye som produseres, eller i henhold til installert produksjonskapasitet. Velferdskostnadene ved å nå et gitt utslippsmål kan øke vesentlig. Det vi derimot kan si er at analysen vår indikerer at betinget tildeling av kvoter vil kunne ha betydelige velferdskostnader, som må veies opp mot eventuelle gevinster av at en unngår karbonlekasje. Betinget tildeling av kvoter til skjermede sektorer som ikke er utsatt for karbonlekkasje vil utvetydig gi uheldige velferdseffekter, spesielt dersom tildelingen knyttes opp mot faktisk produksjon eller investering i ny kapasitet.

We examine the largest cost component in offshore development projects, drilling rates, which have been high in recent years. To our knowledge, rig rates have not been analysed empirically before in the economic literature. Using econometric analysis, we examine the effects of gas and oil prices, rig capacity utilisation, contract length and lead time, and rig-specific characteristics on Gulf of Mexico rig rates. Having access to a unique data set containing contract information, we are able to estimate how contract parameters crucial to the relative bargaining power between rig owners and oil and gas companies affects rig rates. Our econometric framework is a single equation random effects model, in which the systematic part of the equation is non-linear in the parameters. Such a model belongs to the class of non-linear mixed models, which has been heavily utilised in the biological sciences. Research Council of Norway

Karbonlekkasje blir sett på som et av de viktigste problemene ved utforming av klimapolitikk i enkeltland eller grupper av land. I denne artikkelen diskuterer vi karbonlekkasje knyttet til klimapolitikk i Norge eller en gruppe av industriland. Karbonlekkasje forekommer både i energimarkeder og i markeder for energiintensive varer. Vi diskuterer omfanget av karbonlekkasje og effektiviteten av politikk som skal motvirke slike lekkasjer.

We study interactions between a “policy bloc’s” emissions quota market and an offset market where emissions offsets can be purchased from a non-policy “fringe” of countries (such as for the CDM under the Kyoto Protocol). Policy-bloc firms are assumed to benefit from free quota allocations that are updated according to either past emissions or past outputs. We show that both overall abatement, and the allocation of given abatement between the policy bloc and the fringe, tend to be inefficient. When the policy-bloc quota market and offset markets are fully integrated (and firms buy offsets directly from the fringe), and all quotas and offsets must be traded at a single price, it is optimal for the policy bloc to either not constrain the offset market whatsoever, or to ban offsets completely. The former (latter) case occurs when free allocation of quotas is not too generous (very generous), and the offset market can profitably deliver large (only a small) quota amounts. Governments of policy countries would however instead prefer to buy offsets directly from the fringe at a price below the policy-bloc quota price. The offset price will then be below the marginal damage cost of emissions, and the quota price in the policy bloc above marginal damage cost. This solution is also inefficient as the policy bloc (acting as a monopsonist) purchases too few offsets from the fringe. Research Council of Norway

s with downloadable Discussion Papers in PDF are available on the Internet: http://www.ssb.no Abstract: We consider an international emissions trading scheme with partial sectoral and regional coverage. Sectoral and regional expansion of the trading scheme is beneficial in aggregate, but not necessarily for individual countries. We simulate international CO2 emission quota markets using marginal abatement cost functions and the Copenhagen 2020 climate policy targets for selected countries that strategically allocate emissions in a bid to manipulate the quota price. Quota exporters and importers generally have conflicting interests about admitting more countries to the trading coalition, and our results indicate that some countries may lose substantially when the coalition expands in terms of new countries. For a given coalition, expanding sectoral coverage makes most countries better off, but some countries (notably the USA and Russia) may lose out due to loss of strategic advantages. In general, exporters tend to have stronger strategic power than importers. Keywords: Emissions Trading; Allocation of Quotas; Strategic Behavior Financial support from the Renergi programme of the Research Council of Norway and the German Research Foundation (BO 1713/5-1) is appreciated.

Tildeling av gratis klimakvoter kan påvirke bedrifters insentiver til å investere i renere produksjonsteknologi. I denne artikkelen diskuterer vi effektene av gratis tildeling når bedriftene får tildelt et antall omsettelige klimakvoter i henhold til hvor mye de produserer. Fra 2013 vil tildelingsreglene i EUs kvotesystem ligge nært opp til et slikt system. Vi viser at slik tildeling kan stimulere til investeringer i renere teknologi, så lenge bedriftene ikke venter at investeringen fører til at de får tildelt færre kvoter per produsert mengde på et senere tidspunkt.

Artikkelen er gjengitt med tillatelse fra Samfunnsøkonomenes Forening. Sjøkabel framfor luftspenn mellom Sima og Samnanger i Hardanger vil forsinke den nye strømforbindelsen fram til Bergensområdet. Et sentralt spørsmål i valget mellom sjøkabel og luftlinje er derfor hva som blir konsekvensene av forsinkelsen. Hvor lenge må man vente? Hva skjer med forsyningen av strøm til Bergensområdet i ventetiden? Kan man regne med kortere eller lengre perioder med strømavbrudd? Hvis strømforsyningen blir vanskelig, er det i så fall noe en kan gjøre for å forbedre situasjon? Dette var spørsmål som et av Sjøkabelutvalgene (Utvalg III), nedsatt av Olje- og energidepartementet, skulle besvare. Denne artikkelen er basert på hovedkonklusjonene fra utvalgets rapport.

Allocation of emission allowances may affect firms' incentives to invest in clean technologies. In this paper we show that so-called output-based allocation tends to stimulate such investments as long as individual firms do not assume the regulator to tighten the allocation rule as a consequence of their investments. The explanation is that output-based allocation creates an implicit subsidy to the firms' output, which increases production, leads to a higher price of allowances, and thus increases the incentives to invest in clean technologies. On the other hand, if the firms expect the regulator to tighten the allocation rule after observing their clean technology investment, the firms' incentives to invest are moderated. If strong, this last effect may outweigh the enhanced investment incentives induced by increased output and higher allowance price. Financial support from the Renergi programme of the Research Council of Norway and from the NEECI programme of the Nordic Energy Research.

s with downloadable Discussion Papers in PDF are available on the Internet: http://www.ssb.no Abstract: We analyze how different ways of allocating emission quotas may influence the electricity market. Using a large-scale numerical model of the Western European energy market, we show that different allocation mechanisms can have very different effects on the electricity market, even if the total emission target is fixed. This is particularly the case if output-based allocation (OBA) of quotas is used, with gas power production substantially higher, partly at the expense of renewable and coal power, than if grandfathering and auctioning based mechanisms are used. The price of emissions is almost twice as high. Moreover, even though electricity prices are lower, the welfare costs of attaining a fixed emission target are significantly higher. The paper analyzes other allocation mechanisms as well, leading to yet more outcomes in the electricity market. The numerical results for OBA are supported by theoretical analysis, with some new general results. Financial support from the Renergi programme of the Research Council of Norway (RCN).

Artikkelen er gjengitt med tillatelse fra Samfunnsøkonomenes Forening. Hva er hensikten med den foreslåtte loven om elsertifikater? I denne kommentaren vurderer vi elsertifikater som et generelt virkemiddel i energi- og klimapolitikken, og som et virkemiddel for å oppfylle EUs fornybardirektiv. Fornybar energiproduksjon vil spille en stadig viktigere rolle i kampen for å redusere utslippene av klimagasser i Europa og resten av verden. Det er likevel ikke slik at enhver økning av fornybar kraftproduksjon er av det gode, og virkemidler som stimulerer til økt produksjon av fornybar kraft vil ikke nødvendigvis føre til reduserte utslipp av klimagasser. Ettersom fornybar kraftproduksjon i mange tilfeller er kostbart, både med tanke på penger og naturinngrep, er det viktig at det ikke gjøres til et mål i seg selv å bygge ut mest mulig fornybar kraft. Vi etterlyser derfor en grundigere redegjørelse for hva som er det bakenforliggende målet med elsertifikatloven, og hvordan den nye loven skal oppfylle disse målene. Basert på diskusjonen ovenfor vil vi videre konkludere med at elsertifikater på generelt basis er et lite hensiktsmessig virkemiddel i energi- og miljøpolitikken. Det gjelder spesielt i Norge som har lite kraftproduksjon basert på ikkefornybar energi.

s with downloadable Discussion Papers in PDF are available on the Internet: http://www.ssb.no Abstract: Given the bleak prospects for a global agreement on mitigating climate change, pressure for unilateral abatement is increasing. A major challenge is emissions leakage. Border carbon adjustments and output-based allocation of emissions allowances can increase effectiveness of unilateral action but introduce distortions of their own. We assess antileakage measures as a function of abatement coalition size. We first develop a partial equilibrium analytical framework to see how these instruments affect emissions within and outside the coalition. We then employ a computable general equilibrium model of international trade and energy use to assess the strategies as the coalition grows. We find that full border adjustments rank first in global cost-effectiveness, followed by import tariffs and output-based rebates. The differences across measures and their overall appeal decline as the abatement coalition grows. In terms of cost, the coalition countries prefer border carbon adjustments; countries outside the coalition prefer output-based rebates. ___Keywords: emissions leakage, border carbon adjustments, output-based allocation Support from the Research Council of Norway’s RENERGI program, the German Research Foundation (BO 1713/5-1), and the Mistra Foundation’s Environment and Trade in a World of Interdependence (ENTWINED) program is gratefully acknowledged.