Europe beyond coal – An economic and climate impact assessment

Several European countries have decided to phase out coal power generation. Emissions from electricity generation are already regulated by the EU Trading System (ETS), and in some like Germany phaseout of will be accompanied with cancellation emissions allowances. In this paper we examine consequences phasing coal, for CO 2 emissions, sector, broader economy. We show analytically how welfare impacts a region depend on i) whether allowances canceled, ii) other join policies, iii) terms-of-trade effects ETS market. Based numerical simulations computable general equilibrium model economy, quantify economic environmental alternative scenarios, considering both unilateral multilateral phaseouts. find that market play an important role implications across member states. For Germany, combined is found welfare-improving if German citizens value reductions at 65 Euro per ton or more.