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Monjon S.,Center International Of Recherche Sur Lenvironnement Et Le Developpement Cired | Monjon S.,Center dEtudes Prospectives et dInformations Internationales | Quirion P.,Center International Of Recherche Sur Lenvironnement Et Le Developpement Cired
Climate Policy | Year: 2011

This article compares several configurations of a border adjustment (BA) to the EU Emissions Trading Scheme (EU ETS) that are designed to maximize their World Trade Organisation (WTO) compatibility, either with the GATT general regime or with Article XX (its environmental exception rule). The different BAs are assessed quantitatively using the partial equilibrium model CASE II, which represents four sectors included in the EU ETS (cement, aluminium, steel and electricity). The main findings indicate that the inclusion of imports and exports would reduce world emissions more than the inclusion of imports alone,that an obligation to buy EU allowances is more compatible with WTO rules than one based on a tax, and would be better at reducing world emissions. Moreover, if the BA is based on best available technologies, more precisely on the recently defined EU product-specific benchmarks, then the adjustment would only be partial and carbon leakage would nevertheless be significantly reduced. The popular view that a BA contributes to both carbon leakage limitation and to domestic production preservation is discussed, and it is argued on the contrary that although a BA would efficiently limit leakage, a decrease in European production of GHG-intensive products is to be expected. Industries that consume cement, aluminium and steel would pay more for these goods with a BA. Consequently, the price signal should be preserved and diffused in downstream sectors, an expected key result of climate policy. On the contrary, free allocation efficiently preserves domestic production, but does not preserve and diffuse the price signal and is less efficient in limiting leakage. © 2011 Taylor & Francis.


Grant
Agency: Cordis | Branch: FP7 | Program: CP-FP | Phase: SSH-2009-1.2.1. | Award Amount: 3.11M | Year: 2010

The primary objective of this research project is to produce a comprehensive study on the impact of market services on aggregate economic growth in the EU and its comparative performance relative to competitor regions, especially the US. The research is divided into three areas: Productivity and its drivers in service industries; Firm strategies in the knowledge-based economy and Internationalisation of service markets and growth. In the first area the project will explore the impact of intangible assets such as R&D and firm- specific training in explaining the EUs poor performance relative to the US. It will also examine interactions between information and communications technology and intangible investments to gauge to what extent these are complementary strategies to enhance productivity and growth. This area will also contain a detailed investigation of linkages between service sectors and manufacturing through trade in intermediate inputs, and the effect of the competitive and regulatory environment of service industries on growth in the EU. Area 2 on the knowledge based economy will investigate external sources of knowledge creation through an analysis of outsourcing of service functions in the service and the manufacturing sectors and will provide a detailed analysis of productivity and employment effects of innovation activities in different services industries and countries. The third area on internationalisation of services will analyse the extent of international trade, international investment and international outsourcing of services and investigate their impacts on productivity, employment and growth. The methods employed will be mostly quantitative economic analysis, supplemented by case studies. The results of the project will provide a significant advancement of the knowledge base on the impact of service industry performance for strengthening productivity, growth and employment in the EU and so will be a useful resource for policy makers.


Grant
Agency: Cordis | Branch: FP7 | Program: CP-IP | Phase: SSH-2007-1.2-01 | Award Amount: 3.91M | Year: 2008

The chances of European countries to grow, prosper and provide well being to their citizens rest on the ability of their firms to become successful traders and producers in foreign markets within and outside the EU. This project examines the pattern of internationalisation of European firms. With a clear focus on defining adequate and effective policy measures, it looks at the broad factors constraining or enhancing companies foreign operations, like growth in size and productivity; type of ownership and corporate governance; access to financial markets; innovation; the macroeconomic environment. It will do so by combining theoretical and empirical research at the frontier of the academic and policy debate with the gathering of new data through a cross country survey. The main questions addressed by the project are: What are the features of European firms that successfully compete in international markets? To what extent do they contribute to productivity and employment? Does access to foreign market enhance firm performance through a learning process? Why are some countries more successful in international trade and FDI? What are the policies that can improve a nations foreign trade performance? Does integration within the Single Market foster productivity improvements? Has the euro led to a wider participation of firms in cross-border business? What policies can promote the participation of other European firms that are currently excluded from international markets? What are the gains and the adjustments involved in reducing barriers to trade and foreign direct investment (FDI)? What policies can best maximise gains and smooth adjustments?


Grant
Agency: Cordis | Branch: FP7 | Program: CP-FP | Phase: SSH-2007-1.2-03 | Award Amount: 1.27M | Year: 2008

The main purpose of FINESS is to get a clear understanding of the implications of ongoing financial market integration in Europe on economic growth, employment and competitiveness, to identify likely future paths of the development and to draw policy relevant conclusions. Several main breakthroughs will be achieved throughout the project. On the macroeconomic level, the role of financial systems and their transmission channels on growth will be explored by innovative and tailor made econometric techniques, taken dynamic interactions between financial, product and labour markets into account. A range of indicators to measure the degree of financial integration will be constructed, and their development in time will be addressed. Moreover, insights into the working of financial institutions will be provided for the microeconomic level. The comparative approach undertaken by FINESS is especially useful to uncover catalysts and bottlenecks in the architecture of financial systems. By investigating unique datasets, the role of the financial structure, i.e., the banking sector, markets for private equity and venture capital, for improving efficiency and sustainable expansion of start ups and established firms is studied. The impacts of different degrees of financial integration on the portfolio decisions of households are explored with simulation models. Topics specifically related to the transition period of the New Member States as well as the gender dimension in turning impulses from the financial system into efficiency and growth are covered by the project. By fulfilling its goals, FINESS will provide in-depth knowledge on the relationship between financial systems and sustainable economic growth in a changing environment.


Grant
Agency: Cordis | Branch: FP7 | Program: CP-FP | Phase: KBBE-2007-1-4-08 | Award Amount: 3.74M | Year: 2008

International trade reflects complex dynamic processes driven by demographic, socio-economic, technological and political changes. Therefore, future evolution of world markets is highly uncertain. The project builds on past research but emphasizes issues usually overlooked by standard assessments of trade liberalization such as: the impact of demand from energy markets which could affect agriculture and reverse the decline of real farm product prices; the demographic changes, which in some developing and transition countries modify the demand for food, especially that for industrial food processing; the concentration of firms in many global markets, which could modify the expected size and distribution of gains from trade liberalization among stakeholders; the impact of trade liberalization on price volatility, which is a key concern but remains to be thoroughly evaluated; the growing importance of sanitary and technical measures and their potential impact on food security, health issues, and trade. AGFOODTRADE helps answer the following questions: what are major trends and driving forces affecting world trade? What is their impact and how should trade policies deal with these processes in the future? A set of scenarios will be: a) assessed by analysing trends of a selection of indicators; b) quantified by a large scale dynamic general equilibrium model, a spatial trade model and a model of the EU farm sector; and c) tested in five case study countries. The project will provide information, expertise, and operational instruments to policymakers involved in trade negotiations, and agricultural policy design. Project outcomes databases and trade methodologies will have a strong foundation in policy realities thanks to the involvement of stakeholders. The quantitative instruments will ensure a forward-looking assessment of future agreements, including their effects on EU27 trade and the CAP, and answer the Commissions need for quantitative simulations.

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