Tobias F. N. Schmidt

Empirical macro models under test. A comparative simulation study of the employment effects of a revenue neutral cut in social security contributions

In the paper we simulate a revenue-neutral cut in the social security contribution rate using five different types of macro- / microeconomic models, namely two models based on time-series data where the labour market is modelled basically demand oriented, two models of the class of computable equilibrium models which are supply oriented and finally a firm specific model for international tax burden comparisons. Our primary interest is in the employment effects the models predict due to the cut in the contribution rate. It turns out that qualitatively all models considered predict an increase in employment three years after the cut. But the employment effects differ considerably in magnitude, which follows immediately from the different behavioral assumptions underlying the different models.

Double Dividend of Climate Protection and the Role of International Policy Coordination in the EU - An Applied General Equilibrium Analysis with the GEM-E3 Model

While there is some hope that the ongoing climate change negotiations will soon come up with concrete, time scheduled and binding emission reduction commitments, the question of how to achieve these targets is still unsolved. The objective of this paper is to analyse alternative settings of an environmental tax reform and its economic and environmental impacts on the EU. The methodological framework used is based on a multi-country and multi-sectoral computable general equilibrium model for eleven EU-member states. The emphasis of the analysis lies on the institutional setting of a carbon dioxide reduction policy and on the specification of the labour market. The institutional settings analysed are related to the degree of environmental policy coordination. As standard neo-classics neglegt the problem of unvoluntary unemployment, we relax this restriction in the second part of the analysis in order to test alternative (more rigid) labour market specifications. The major findings of the paper can be summarized as follows: 1) There is some potential for a double dividend in the EU. 2) Coordination beats not always unilateral actions. 3) Labour market rigidities play a crucial role to both, the double dividend and the coordination issue.

The international policy dimension of sustainability — the effect of policy harmonization within the EU using the GEM-E3 model

Current CO2 emission will lead to a pattern of greenhouse gas accumulation that is not sustainable. World wide CO2 emissions have increased by 10% from 1985 to 1992. Some industrial countries have had growth rates of more than 30% (Portugal, Greece, Ireland), and concern for the potential climate implications from energy consumption has raised the desirability of policy harmonization, although this desirability is not shared by all countries. There is still a debate about how much damage is actually being done to the environment. Many environmentalists and governments are concerned that excessive emissions of CO2 are irreversibly warming the planet. Others, however, feel that the evidence is insufficient at this point and are unwilling to alter their environmental policy significantly. The surface records show, however, that the earth has warmed by about half a degree in the past century and that the warming has accelerated in the past two decades. Mainstream climatologists say the warming probably has been caused, at least in part, by emissions of heat-trapping waste industrial gases such as CO2, and they estimate that the surface will warm by about another 1.5°; over the next century if emissions are not reduced. One consequence of a warmer earth, scientists say, would be heavier precipitation; a warmer atmosphere holds more moisture. US government researchers say they have, in fact, linked this century’s warming to a 20% increase in heavy precipitation in the United States. The problem with environmental damage such as global warming is, however, that the appropriate policy may need to be implemented before conclusive proof that the damage due to the cumulative effect will occur is available.

Beschäftigungswirkungen umweltpolitischer Instrumente zur Förderung integrierten Umweltschutzes

Wie der Sachverstandigenrat fur Umweltfragen in seinem 1994er Gutachten anmerkt, setzt „die Ablosung der bisherigen, mit additiven Schutzmasnahmen operierenden Produktionsweisen durch Verfahren des produktionsintegrierten Umweltschutzes nicht von selbst - als Wettlauf zwischen den Unternehmen - ein“ (SRU 1994:133). Der Umweltrat fordert daher eine Umweltpolitik, die entsprechende dynamische Innovationsanreize auslost, d.h. ein Anreiz zu umwelttechnischem Fortschritt gegeben wird.

Internalisation of Externalities

The internalisation of external effects is an important policy guideline in the Energy and Environmental policy at EU level. The objective of this chapter is to evaluate the macroeconomic and welfare impacts of a policy aiming at applying this guideline to the externalities generated by energy consumption. It will also contribute to a comparison of an integrated policy approach towards air compared to a policy addressing only the global warming issue. In most sectors these emissions are one of the main sources of external cost. A policy scenario will be defined in which an environmental cost is applied on the emissions in proportion to the damage generated by these emissions.

Environmental Policy Analysis Using CGE Models

Given the challenge of more restrictive environmental regulation in the near future, it is becoming more and more important to quantify the costs of such a policy. Policies aimed at significantly reducing environmental problems such as global warming, acid rain, deforestation, waste disposal or any other degradation of the quality of air, water, soil or land imply mostly drastic emission reductions. Obviously, the implementation of environmental policy instruments to improve the quality of the environment should not hinder other economic goals like GDP growth, international competitiveness or employment. The discussion whether there exists a “no regret” policy, that improves environmental quality without negative impacts on the economy has been held for a long time but has not yet lead to a conclusion. In principle, large emission reductions tend to have a significant impact on costs in one or several sectors of an economy. The implied change in relative prices will induce general equilibrium effects throughout the whole economy. For this reason it is often useful to evaluate the effect of environmental policy measures within the framework of a computable general equilibrium (CGE) model. Models of this type are a computer representation of a national economy or a region of national economies, each of which consists of consumers, producers and a government. Consumers purchase goods from producers, supply factors of production, save, and pay all kind of taxes to, and receive transfer payments from, government. Producers supply goods, demand factors of production, invest, and pay also taxes or receive transfer payments.

Motivation für die Auswahl des Modellansatzes

Zur Entwicklung eines konzeptionellen Rahmens, der quantitative Analysen umweltpolitischer Strategien ermoglicht, bietet sich eine ganze Reihe von methodisch zum Teil sehr unterschiedlichen Ansatzen an. Die Entscheidung uber die Wahl des Ansatzes und die Gestaltung des daraus zu entwickelnden Modells erfordert vorab eine Auseinandersetzung mit den konzeptionellen Moglichkeiten, die zur Beantwortung der oben skizzierten Fragestellung in Betracht kommen. Ziel dieses Kapitels ist es, das grundsatzliche Vorgehen der Entwicklung des in Teil B der Arbeit vorgestellten Modells darzustellen und zu begrunden.

Grenzüberschreitende Umweltprobleme: Umweltökonomische Relevanz und politische Reaktion

Ziel dieses Kapitels ist es, die der vorliegenden Arbeit zugrundeliegende Problemstellung aus der aktuellen umweltpolitischen Diskussion herauszuarbeiten. Es werden die wesentlichen Konfliktfelder diskutiert, die als Ursachen fur die Langwierigkeit der Verhandlungen bzw. fur die derzeit beobachtbaren Verzogerungen des Abschlusses verschiedener Umweltabkommen auszumachen sind. Im besonderen dreht es sich dabei um die Frage der Verteilung der mit einer ‘Verbesserung der Umweltqualitat’ potentiell verbundenen okonomischen Lasten, sowie um die vermuteten Ursachen derselben. Grundsatzlich drangt sich die Frage auf, ob und in welchem Umfang eine ‘Verbesserung der Umweltqualitat’ mit den Wohlfahrtsdeterminanten ‘internationale Wettbewerbsfahigkeit’, ‘Produktivitat’ und ‘okonomische Entwicklung’ in komplementarer oder konfliktarer Zielbeziehung steht (2.1).

The Role of Accompanying Policies

The emission-constrained cases impose additional costs to all producers and consumers. This additional cost, being necessary to reach the target, depends on the equilibrium shadow cost per unit of emissions, which is computed at the EU level. Mathematically, the mechanism is exactly equivalent to the imposition of that level of carbon tax (uniform across the EU) that is necessary to reach the target.

EU-Klimapolitik, ökologische Steuerreform und die Hoffnung auf eine zweite Dividende

Mit den im Rahmen der Klimakonvention von der EU eingegangenen Verpflichtungen ist die Diskussion um ein geeignetes Instrumentenpaket, das die Umsetzung dieser Verpflichtungen unterstutzt, neu entfacht. Der Reigen moglicher umweltpolitischer Instrumente zur Realisierung umweltpolitischer Ziele ist weitreichend und vielseitig. Die Grundformen, d.h. Emissionssteuern, Emissionszertifikate, freiwillige Selbstverpflichtungen oder ordnungsrechtliche Auflagen, lassen sich einzeln oder kombiniert in einer Vielzahl von Varianten ausgestalten. Entsprechend umfangreich ist die Literatur, die sich mit der Konzeption von Instrumenten bzw. des geeigneten Instrumentenmixes beschaftigt.242