ISSN:
1573-1502
Keywords:
Coal subsidies
;
CO2 emissions
;
employment and environmental policy
Source:
Springer Online Journal Archives 1860-2000
Topics:
Energy, Environment Protection, Nuclear Power Engineering
,
Economics
Notes:
Abstract Fossil fuel subsidies are applied in many countries for different policy reasons such as maintaining jobs in fossil fuel sectors, securing national energy supply or lowering the energy costs of selected industries to strengthen competitiveness. The current economic costs of fossil fuel subsidy policies can be substantially increased by future environmental constraints. We illustrate this point in the framework of a general equilibrium analysis for Germany where we quantify the economic costs of alternative hard coal subsidy policies at different CO2 reduction levels. Our calculations show that German hard coal subsidies as a means of retaining jobs can get very expensive with additional specific costs of up to annual 70 000 DM per job for a given CO2 reduction target of 35%. Though the empirical analysis is focused on Germany the general conclusion that current subsidy policies of fossil fuels must be fundamentally reconsidered in view of forthcoming environmental constraints is also relevant for other countries.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF00339081
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