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Environmental Policy in an Open Economy: Refocusing Climate Policy to Address International Trade Spillovers

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Dynamic Approaches to Global Economic Challenges

Abstract

On looking at the development of greenhouse gas emissions over the last few decades, we find that while some countries and regions (such as the EU) have succeeded in reducing territorial emissions, their consumption patterns have often resulted in an increase in emissions elsewhere on the globe (consumption-based emissions). We thus argue that given the current piecemeal nature of (global) climate policy, and in order to address global emission development more adequately, existing policy instruments need to be augmented. We discuss improvements needed in the emission indicator system (i.e. emission accounting beyond the current UNFCCC standards), and identify the core fields of future development in emission reduction policy. These are discussed in some detail to be in consumption-oriented, extraction-oriented, and income-oriented policy instruments. All these are needed in order to ensure effective greenhouse gas emission reduction at the global level.

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Notes

  1. 1.

    This reasoning holds true only if combustion-based CO2 emissions are considered and only if it is assumed that the combustion of fossil fuels generates the same amount of CO2 emissions irrespective of sector, i.e., irrespective of how or where they are burnt. In reality, however, some sectors also emit considerable amounts of CO2 emissions which are not directly related to fossil fuel inputs in production (Bednar-Friedl et al. 2012b). Moreover, different combustion processes also lead to different CO2 emissions. For example, some industrial processes do not combust the full amount of fossil fuels but store a fraction of carbon in the resulting production (Lee 2008).

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Acknowledgements

The authors thank Karl Farmer for the extraordinary research and personal atmosphere that he created and continuously nourished—that we as well as our colleagues at the Economics Department at Graz University so much enjoyed. This is much more than one could ever hope for to find at any research environment. Furthermore, the authors thank Birgit Bednar-Friedl, Moritz Kammerlander, Ines Omann and Glen Peters for their help on various concepts developed and discussed here. Funding for this research was granted by the Austrian Climate and Energy Fund (Austrian Climate Research Program, project INNOVATE).

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Authors and Affiliations

  1. Department of Economics, University of Graz, Universitätsstraße 15, 8010, Graz, Austria

    Karl W. Steininger

  2. Wegener Center for Climate and Global Change, University of Graz, Brandhofgasse 5, 8010, Graz, Austria

    Karl W. Steininger & Thomas Schinko

  3. International Institute for Applied Systems Analysis (IIASA), Schlossplatz 1, 2361, Laxenburg, Austria

    Thomas Schinko

Authors
  1. Karl W. Steininger
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Correspondence to Karl W. Steininger .

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Editors and Affiliations

  1. Department of Economics & Wegener Center for Climate and Global Change, University of Graz, Graz, Austria

    Birgit Bednar-Friedl

  2. Department of Economics, University of Graz, Graz, Austria

    Jörn Kleinert

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Steininger, K.W., Schinko, T. (2016). Environmental Policy in an Open Economy: Refocusing Climate Policy to Address International Trade Spillovers. In: Bednar-Friedl, B., Kleinert, J. (eds) Dynamic Approaches to Global Economic Challenges. Springer, Cham. https://doi.org/10.1007/978-3-319-23324-6_11

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