Servizio Comunitario di Informazione in materia di Ricerca e Sviluppo - CORDIS

Empirical assessment of the economic impact of environmental protection measures

A methodological framework was developed which would allow the empirical assessment of the economic impact of environmental protection measures, such as the taxation of carbon dioxide emissions, in terms of industrial competitiveness. The framework also assessed the economic impact of technological innovations in the energy sector.

Analysis was undertaken of the specific case of economic instruments for reducing carbon dioxide production in the energy sector The results cover three scenarios: energy taxation of firms and recycling by subsidies for the implementation of best-available technologies (BAT); energy taxation of firms and low-cost loans to help implement BAT; European eco-taxes and recycling by lowering the burden of social security rates on employers. It was found that only the third scenario gave the 'double-dividend' or 'win-win' situation of increased employment with increased environmental quality. The predicted increase of 860 000 in the level of employment is higher than that from the HERMES model, even taking into account the impact of BAT implementation by firms. A published report is available which describes in detail the methodology employed in the various sections of the projects and the results achieved. The report is entitled 'The Technological Progress for the Competitiveness and the Employment: The Case Energy-Environment' and can be obtained from the European Commission.

Two important results were obtained from this research project. One was that the various models used demonstrate the existence of the double-dividend, meaning that environmental protection measures do not necessarily reduce a nation's competitive position and level of employment. The other was the development of new analytical tools and economic models which are able to integrate recent advances in economic theory, new concepts and methods of industrialization, and how firms adopt new technologies.


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