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Home > IMACLIM > Research Thematics > Sectoral impact and climate policy

Sectoral impact and climate policy

The objective of this research axis is to develop tool which integrates enough sectoral details to conduct studies on competitiveness issues and environmental efficiency.

In a globalization context, the consequences of asymmetric carbon constraints on industries competitiveness – in particular the energy-intensive and trade-exposed industries (EITE)- and on carbon leakage drive concern and often come up in the debate. Although the value-added of these industries represents a small fraction of the industrialised countries’ GDP, their production remains highly strategic, and the power of industrial lobbies has already proven to be decisive regarding any attempt to implement ambitious environmental actions.

If partial equilibrium models bring high details on some keys EITE sectors (as cement and steel sectors) and use relevant empirical information to analyse specific competitiveness constraints facing by those sectors, computable General Equilibrium models often represent the economic system in a more aggregated way.
By taking advantage of the IMACLIM data hybridization procedure, we aim to isolate some sectors of their initial aggregates while integrating physical data. It represents a twofold opportunity: (i) to go beyond previous disaggregation techniques based only on economic data, (ii) to calibrate our modelling framework on sectoral granularity, relevant enough to assess the sectoral impacts of a carbon policy.

A gain in sectoral granularity makes it possible to establish a dialogue with different economic agents, and at various scales: from a macro level (impacts on employment, debt, etc.) to a more precise level (stakeholders of some industrial sectors). It is then possible to clarify, sector by sector, the values given to some controversial parameters (elasticity of external trade, wage curve) of IMACLIM framework, yet key in the macroeconomic and sectoral outcomes of a climate policy analysis.
In the end, we can better detect the nature of mechanisms at play, and understand competitiveness issues at stake while giving insights on the sectoral distributive effects of the environmental policy (a unilateral carbon tax for instance).

So far, these issues have been arisen relying on the IMACLIM-country model, for the French case, but hold for all the economies.

Gaëlle Le Treut:letreut@centre-cired.fr
Jean-Charles Hourcade: hourcade@centre-cired.fr

- Le Treut G, Combet E., 2017. Climate policy design and the competitiveness of the French industry: A Computable General Equilibrium Analysis, Les cahiers de la chaire, Working Paper N°2016–06–24