My Research
My Research
Journal of Environmental Economics & Management
I show how the exemption of small-scale emitting firms from emissions pricing results in within-country emissions leakage --- an emissions price increase for the regulated firms prompts an increase in the emissions of the unregulated. I use a heterogeneous firm model in which a fixed share of firms is subject to emissions pricing. The firms at the lower part of the productivity distribution benefit from being exempted, such that the higher the emissions price, the more and dirtier firms can survive in the domestic market. Leakage is stronger if firms are exempted only if they emit less than a fixed threshold (as for the EU Emission Trading System) because some firms strategically bunch below the threshold, making the emissions price an even weaker tool to reduce total emissions. In environments with low social costs of emission or high fixed regulatory costs, an exemption may be justified; over time, however, the criteria for exemptions should be adjusted accordingly.
(with Stela Rubínová)
This study examines the impact of policies that affect the cost of using fossil fuels in production on the pattern of comparative advantage in the industrial sector. Firstly, we use a fixed-effects gravity model of trade to estimate the export capabilities that determine comparative advantage. Subsequently, using data on both direct and indirect carbon pricing policy instruments for 45 economies from 2010 to 2018, we estimate that a 10% increase in carbon price is associated with a decline in export capability in the most carbon-intensive industry by 0.3% to 0.7%. We also find empirical support for competitiveness spillovers to domestic downstream industries. Overall, changes in carbon pricing can explain up to 1.2% of the variation in export capabilities over time. We illustrate the potential impact of fossil fuel subsidies removal by comparing independent action to global coordination, concluding that coordinated efforts can reduce the adverse effects on comparative advantage.
(with Carolyn Fischer and Gerard van der Meijden)
This paper analyses how market power in critical minerals affects the low-carbon transition. Green technologies are heavily reliant on mineral inputs like cobalt, lithium, and nickel, for which supplies are unusually concentrated, leading to geopolitical tensions and trade policy interventions. Using a two-region model, we examine strategic competition between resource-rich regions (East) and resource-scarce ones (West). Both regions mine and trade minerals, which are essential for producing green technology goods needed to replace fossil fuels in energy production. Policy interventions include East cartelising its mineral markets and taxing mineral exports, while West may impose tariffs on green good imports or invest in domestic mineral recycling. While trade measures increase costs and slow the green transition, recycling subsidies in West can reduce resource dependency and support green capital production, highlighting the need for balanced policy approaches to mitigate welfare losses.