March 17, 2023
ISBA - C115 (1st Floor)
SEMINAR by Simone Maxand (Europa-Universität Viadrina) on "A (panel) SVAR for European carbon pricing"
Carbon pricing is seen as a crucial tool for achieving the set goals of carbon neutrality in Europe. This paper studies the current dimensions of carbon pricing, focusing on the EU emission trading system and country specific carbon taxes, to better understand their interaction with economic performances in Europe. We analyse and compare the different tools by means of two levels of structural VAR models. For the European wide context of the ETS we apply a monthly smooth transition SVAR model identified by non-Gaussianity and narrative sign restrictions and find heterogeneous effects over two regimes of economic activity. Further, we study effects of individually set carbon taxes in a new version of panel SVAR models which accounts for the joint market development and different economic sectors. Joining the results enables to discuss the effectiveness of current and potential future carbon pricing tools in Europe.