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Can Degrowth Overcome the Leakage Problem of Unilateral Climate Policy?

Title data

Larch, Mario ; Löning, Markus ; Wanner, Joschka:
Can Degrowth Overcome the Leakage Problem of Unilateral Climate Policy?
In: Ecological Economics. Vol. 152 (2018) . - pp. 118-130.
ISSN 0921-8009
DOI: https://doi.org/10.1016/j.ecolecon.2018.05.026

Official URL: Volltext

Abstract in another language

Unilateral climate policy suffers from carbon leakage, i.e. the (partial) offset of the initial emission reduction by increases in other countries. Different than most typically discussed climate policies, degrowth not only aims at reducing the fossil fuel use in an economy, but rather (besides other social and political goals) at a reduction of all factor inputs, which may lead to different leakage implications. We conduct the first investigation of de- growth in a multi-country setting in order to (i) compare the leakage effects of national pure emission reduction policies to degrowth scenarios, (ii) identify underlying channels by decomposing the implied emission changes into scale, composition, and technique effects, and (iii) investigate which country characteristics determine degrowth's relative effectiveness to overcome the leakage problem. Using a structural gravity model, we find that degrowth indeed significantly reduces leakage by keeping the sectoral composition of the country more stable and reducing uncommitted countries' incentives to shift towards more energy-intensive production techniques. The higher effectiveness of degrowth in reducing carbon emissions is most pronounced for small and trade-open economies with comparatively clean production technologies.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Degrowth; Climate policy; Gravity model; Carbon leakage
Subject classification: F18
Q54
Q57
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung > Lehrstuhl für Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung - Univ.-Prof. Dr. Mario Larch
Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences > 330 Economics
Date Deposited: 13 Jul 2018 06:32
Last Modified: 13 Jul 2018 06:32
URI: https://eref.uni-bayreuth.de/id/eprint/45020