Work Package 3: Simulation of Carbon Taxation and Recycling Scenarios
Description
Scenario simulations were conducted with the enhanced ADAGIO model (Work Package 2). Thereby the effects of the CO2 taxes and revenue recycling mechanisms elaborated in Work Package 1 were assessed. The model analysis delivered results on the aggregate economic effects (i.e., changes in GDP and employment) as well as changes in greenhouse gas emissions until 2030 on the national level.
The scenario simulations also showed the household types most vulnerable to rising energy prices in terms of, e.g., decreasing consumption opportunities or reduced employment opportunities. In addition, the results revealed the recycling mechanisms most adequate to alleviate the negative impacts on income distribution and competitiveness.
In order to validate the results, comprehensive sensitivity analyses were performed. This included sensitivity with respect to different CO2 price levels, to changes in the model closure, and to changes in the exchange rate.
