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Speaker: Filippo Maria D’Arcangelo, OECD Economist
Title: Carbon prices, emissions and international trade in sectors at risk of carbon leakage
Abstract :What is the effect of recent carbon price developments on domestic emissions and carbon leakage? In this talk, we revisit a recent OECD working paper, developing a comprehensive plant-level emission and carbon pricing dataset covering the cement and steel sectors in 140 countries. The new dataset reveals that carbon price asymmetries among trading partners increased by more than three times. We estimate the net effect of this rising carbon prices on domestic and trade-embedded emissions. To do so, we trade shocks in renewable energy supply as an instrumental variable, providing credible exogenous variation to identify the causal effect of carbon pricing on domestic and traded emissions. Results suggest that, on average, a USD 1 increase in carbon prices reduces domestic cement and steel plants’ emissions by 1.3%. For each 8 tonnes of emissions reduced this way, we estimate that about 1 tonne is offset by carbon leakage. We explore economic and technology channels that drive these results.
Practical informations : Our Friday Lunch Meeting will take place from 12.30 to 2.00 pm
FLMs are held in a face-to-face format in the seminar room on the 4th floor of the Palais Brongniart, 28 Place de la Bourse, 75002 Paris.
Please note that places are limited, so registration is compulsory.
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