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Sectoral Incidence and Efficiency of Climate Policy: A Quantitative Economic Analysis of Alternative Policy Designs,Used
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The EU advocates minimising potentially significant competitiveness losses in energyintensive industries as a politically feasible approach to climate policy. This book analyses industrydistributional effects of European climate policy and evaluates different policy designs tailored to neutralise detrimental impacts of ambitious climate actions on competitiveness of domestic energyintensive branches. The numerical analysis shows that alternative policy designs may considerably differ in terms of macroeconomic implications. Unilateral policies, i.e. intersectoral carbon price differentiation strategies and different forms of border adjustments, have the potential to neutralise adverse implications on competitiveness of energyintensive industries in Europe. But these measures can induce significant economic inefficiencies. The gradual movement towards a global carbon regime represents a superior alternative to unilateral measures. It allows realising a costefficient and globally effective climate policy while limiting negative impacts on competitiveness of domestic industries.
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