Adam Smith Business School

Dr Livio Stracca, European Central Bank

"Pollution Havens? Carbon Taxes, Globalisation, and the Geography of Emissions"
Monday, 18 September. 3 p.m.
Room 355, Main Building

Abstract

Academic presentation: “Pollution Havens? Carbon Taxes, Globalisation, and the Geography of Emissions” (joint work with Christopher Schroeder, paper attached

This paper studies the impact of national carbon taxes on CO2 emissions. To do so, we run local projections on a cross-country panel dataset, matching measures of emissions of carbon dioxide with information on the introduction of carbon taxes and their implied price. Importantly, we consider both measures of territorial emissions --- emissions emitted within a country's borders --- and consumption emissions --- emissions emitted anywhere in the world to satisfy domestic demand. We find that carbon taxes reduce territorial emissions over time, but have no significant effect on consumption emissions. Our estimates are robust to propensity-score weighting adjustments and are driven by countries which are more open to trade. Carbon taxes also lead to a modest increase in imports, suggesting that international trade may imply a negative carbon externality. Together, our findings highlight the limitations of national carbon taxes in isolation and the importance of international cooperation in reducing global emissions.

Policy presentation: The NGFS climate scenarios: Value added, uses and limitations

This presentation covers the main elements of the climate scenarios published by the Network for Greening the Financial System (whose workstream is currently chaired by the ECB). It also discusses the main limitations as well as the potential use for climate stress tests in the financial sector. Finally, it touches on the main climate change topics that are of current interest for central banks and where more research is needed.

Bio

Livio Stracca is the Deputy Director General of Macroprudential Policy & Financial Stability at the European Central Bank and an adjunct Professor at the University of Frankfurt J.-W. Goethe. He has a PhD in Economics and a postgraduate degree in European Union Law. He has published extensively in international macroeconomics, international finance, and monetary economics.

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For further information, please contact business-school-research@glasgow.ac.uk

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First published: 12 September 2023