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GTAP Resource #3129

"The Costs of the EU Energy Package for Finland- a CGE Assessment for Finland"
by Honkatukia, Juha

The European Union has committed to cutting its greenhouse gas emissions by an average of 20 per cent by the year 2020. In addition, there is a commitment to increasing the share of renewable energy within EU to 20 per cent of energy consumption, also by the year 2020. Finally, energy saving is also given a 20 per cent target by 2020. The European Council accepted the Energy and Climate package in December 2008, making the targets binding for all member countries. This study evaluates the long-run effects of the package from the Finnish point of view.

The study utilises specific sectoral models and a CGE model to evaluate the effects of the full climate and energy package. Our sectoral effects indicate that the energy package accelerates structural change towards a more service-based economy. This may prove challenging, unless productivity growth in the service sector is increased, since the service sector is under increasing pressure coping with the demand of an ageing population. Our regional results also point to structural change in regions that are affected by the slower growth of energy-intensive industries. Finally, we find that the distributional effects of the energy package are surprisingly small, contrary to previous studies on the distributional effects of energy taxes. This is due to the energy package encompassing all energy, not just transport fuels whose consumption shares are larger in lower-income groups. The package thus also increases the costs of the non-fuel energy use of wealthy income groups, distributing the costs of the package more evenly

Resource Details (Export Citation) GTAP Keywords
Category: 2009 Conference Paper
Status: Published
By/In: Presented at the 12th Annual Conference on Global Economic Analysis, Santiago, Chile
Date: 2009
Created: Honkatukia, J. (4/15/2009)
Updated: Honkatukia, J. (4/15/2009)
Visits: 1,872
- Economic growth
- Climate change policy
- Dynamic modeling
- Europe (Northern)

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