The OECD’s ENV-Linkages model, with its general equilibrium structure, is a powerful tool to analyse the impacts of climate change and energy policies policies. Analytical work based on the ENV-Linkages model development spans over a wide range of issues dealing with the interlinkages between environment and the economy: costs and effectiveness of carbon markets, linking of carbon markets, climate change mitigation and employment, climate change mitigation policies and energy policies such as the removal of fossil fuel subsidies.

CARBON MARKETS

• Addressing Competitiveness and Carbon Leakage Impacts Arising from Multiple Carbon Markets: A Modelling Assessment examines the macroeconomic and sectoral competitiveness and carbon leakage impacts associated with a range of mitigation policy scenarios. The paper also investigates some policies to address competitiveness and carbon leakage issues.
• Towards Global Carbon Pricing: Direct and Indirect Linking of Carbon Markets presents an analysis of Emissions trading systems (ETS). ETS can play a major role in a cost-effective climate policy framework. Both direct linking of ETSs and indirect linking through a common crediting mechanism can reduce costs of action.
• Costs, Revenues and effectiveness of the Copenhagen Accord: Emission Pledges for 2020 examines costs and effectiveness of the Copenhagen pledges, using the OECD’s ENV-Linkages computable general equilibrium model. Several scenarios are analysed to evaluate the impacts of the range of pledges, the use of offsets, and linking emission trading systems.
• Is there a Case for Carbon-Based Border Tax Adjustment? uses a global general equilibrium model to assess the economic effects of BTAs.
• More about .

 

CLIMATE CHANGE MITIGATION POLICIES

• Impacts of Green Growth Policies on Labour Markets and Wage Income Distribution: A General Equilibrium Application explores the consequences on the labour markets of structural changes induced by decarbonisation policies. These policies are likely going to have consequences on labour-income distribution given i) existing rigidities in the labour markets, and ii) their different impacts on sectors and on job categories.
• Employment Impacts of Climate Change Mitigation Policies in OECD: A General-Equilibrium Perspective provides an analysis of how the implementation of a green growth agenda may translate into deep changes in the labour market that extend far beyond the creation of what are often labelled as “green jobs”. While there are a number of opportunities associated with green growth, there are also costs associated with the transition.
• The Economics of Climate Change Mitigation: Policies and Options for Global Action Beyond 2012 explores through quantitative analysis feasible ways to abate greenhouse gases at least cost, in the context of a projected doubling of world greenhouse gas emissions by mid-century. 
• More about Economics of Climate Change Mitigation.

 

AIR QUALITY

• The economic benefits of international co-operation to improve air quality in Northeast Asia: A focus on Japan, Korea and China outlines the additional benefits from internationally coordinated policy action on air pollution in Northeast Asia.
• The economic consequences of air pollution policies in Arctic Council countries: A Sectoral Analysis presents a sectoral analysis of the socio-economic consequences of policy action to reduce air pollutants in Arctic Council countries.
• The Economic Benefits of Air Quality Improvements in Arctic Council Countries presents an analysis of the socio-economic benefits of policy action to reduce air pollutants in Arctic Council countries. 
• The Economic Consequences of Outdoor Air Pollution presents projections on emissions and concentrations of air pollutants, as well as their impacts on human health and the environment globally.

 

ENERGY

• The ENV-Linkages model has traditionally been linked to the IEA World Energy Model (WEM) to provide economic impacts of the IEA World Energy Outlooks scenarios. Since 2011, a sophisticated methodology is used to link these models. Read more on the Macroeconomic of energy efficiency using the OECD ENV-Linkages model.
• The Economic Impacts of the IEA World Efficient Scenario (2014) provides a background report on macroeconomic impacts of the "World Efficient Scenario" presented in the WEO (2012) and highlights the economic and environmental benefits of investing in energy efficiency.
• Modelling of distribution impacts of energy subsidy reforms: An illustration with Indonesia provides, in the case of Indonesia, an assessment of the economic, environmental and distributional impacts of fossil fuels consumption subsidy reforms. The study is based on the context that pertained until mid-2014, when international oil prices where high and before the recent phase out of Gasoline and Diesel subsidies by the Indonesian authorities. This work is based on a version of ENV-Linkages that includes over 10 000 Indonesian household groups.
• Mitigation Potential of Removing Fossil Fuel Subsidies: A General Equilibrium Assessment (2011) discusses the assumptions, data and both environmental and economic implications of removing fossil fuel subsidies, using the ENV-Linkages model.
• The Scope of Fossil-Fuel Subsidies in 2009 and a Roadmap for Phasing out Fossil-Fuel Subsidies: An IEA, OECD and World Bank Report (2010) presents selected elements of the OECD input to a Joint Report on fossil fuel subsidies prepared by the OECD, IEA, OPEC and World Bank, as requested by G20 Leaders in September 2009.
• The Trade Effects of Phasing Out Fossil-Fuel Consumption Subsidies (2011) is a companion paper about trade effects of these co-ordinated multilateral removals of fossil-fuel consumption subsidies.
• More about the OECD-IEA work on Fossil Fuel Subsidies and Other Supports.

 

EMPLOYMENT AND DISTRIBUTIONAL ISSUES

• Impacts of Green Growth Policies on Labour Markets and Wage Income Distribution: A General Equilibrium Application explores the consequences on the labour markets of structural changes induced by decarbonisation policies. These policies are likely going to have consequences on labour-income distribution given i) existing rigidities in the labour markets, and ii) their different impacts on sectors and on job categories.
• Employment Impacts of Climate Change Mitigation Policies in OECD: A General-Equilibrium Perspective provides an analysis of how the implementation of a green growth agenda may translate into deep changes in the labour market that extend far beyond the creation of what are often labelled as “green jobs”. While there are a number of opportunities associated with green growth, there are also costs associated with the transition.

 

FURTHER READING

• Environment-economy modelling
• Environment-economy modelling tools
• OECD Environmental Outlooks
• Modelling analysis of employment and distributional impacts of environmental policies
• OECD work in support of climate action

 

CONTACT & SOCIAL MEDIA

• Stay tuned on Twitter: @OECD_ENV.
• For more information, contact us by email. 
  
• To receive our latest Environment news, publications and events, sign up to MyOECD.