Economic Dynamic Modelling of Climate Policy in Poland
Economic Dynamic Modelling of Climate Policy in Poland
Author(s): Olga Kiuila, Anna LewczukSubject(s): Economy, Financial Markets
Published by: Wydawnictwa Uniwersytetu Warszawskiego
Keywords: computable general equilibrium modelling;decarbonization;energy technologies
Summary/Abstract: Poland is responsible for 9% of CO2 emission in the European Union (EU), making it the fifth biggest emitter in the region. The energy sector is dominated by electricity produced from coal (around 70%). The country currently uses massive subsidies to boost the coal sector. We propose a dynamic intertemporal hybrid general equilibrium model to simulate the economic effects of sector regulations and new policy targets within environmental taxation scenarios, by accounting for a complex set of linkages between the energy sector and other components of the economy. Our simulation results suggest that positive economic growth is possible with a realistic energy mix, but it will not offer considerable emission reduction, as required by the European Commission. In the short-time horizon, the best choice is renewable energy sources indicated by less capital-intensive technologies (such as biomass). In the long-time horizon, more capital-intensive technologies (such as wind turbines) will be a better choice for economic growth. Carbon tax plays a crucial role in optimal energy mix targets, since its elimination ceteris paribus implies negative economic growth
Journal: Central European Economic Journal
- Issue Year: 8/2021
- Issue No: 55
- Page Range: 246-255
- Page Count: 10
- Language: English