Labor Market Distortions and Welfare-Decreasing International Emissions Trading

Shiro Takeda, Toshihide Arimura, Makoto Sugino

    研究成果: Article

    抄録

    Using a multi-region, multi-sector computable general equilibrium model, this paper analyzes the effects of international emissions trading (IET) with a focus on labor market distortions. We construct four separate models with several different labor market specifications: (1) a model without labor market distortions; (2) a model with taxinteraction effects in the labor market; (3) a model with a minimum wage; and (4) a model in which a wage curve determines wages. We use these models to analyze how the effects of IET change according to model specification. The main results from the analysis are as follows. First, we found that IET generates gains for all participants in the model without labor market distortions. Second, even in the models with labor market distortions, importers of emissions permits are highly likely to benefit. Conversely, we show that the possibility of a welfare loss from IET is not as small for exporters of permits. In particular, in the minimum wage and wage curve models, we found that the exporters of emissions permits are likely to be disadvantaged. However, this also depends on the region in question. For example, China is likely to suffer under IET, whereas Russia is likely to benefit. Finally, if we implement policies to alleviate labor market distortion simultaneously with emissions regulation, all regions receive benefit from IET.

    元の言語English
    ジャーナルEnvironmental and Resource Economics
    DOI
    出版物ステータスAccepted/In press - 2019 1 1

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    emissions trading
    labor market
    wage
    minimum wage
    Emissions trading
    Labour market
    computable general equilibrium analysis

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Management, Monitoring, Policy and Law

    これを引用

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    title = "Labor Market Distortions and Welfare-Decreasing International Emissions Trading",
    abstract = "Using a multi-region, multi-sector computable general equilibrium model, this paper analyzes the effects of international emissions trading (IET) with a focus on labor market distortions. We construct four separate models with several different labor market specifications: (1) a model without labor market distortions; (2) a model with taxinteraction effects in the labor market; (3) a model with a minimum wage; and (4) a model in which a wage curve determines wages. We use these models to analyze how the effects of IET change according to model specification. The main results from the analysis are as follows. First, we found that IET generates gains for all participants in the model without labor market distortions. Second, even in the models with labor market distortions, importers of emissions permits are highly likely to benefit. Conversely, we show that the possibility of a welfare loss from IET is not as small for exporters of permits. In particular, in the minimum wage and wage curve models, we found that the exporters of emissions permits are likely to be disadvantaged. However, this also depends on the region in question. For example, China is likely to suffer under IET, whereas Russia is likely to benefit. Finally, if we implement policies to alleviate labor market distortion simultaneously with emissions regulation, all regions receive benefit from IET.",
    keywords = "Computable general equilibrium analysis, International emissions trading, Labor market",
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    year = "2019",
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    doi = "10.1007/s10640-018-00317-4",
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