Greek Economists for Reform.com

This blog publishes articles by leading academic economists on issues relevant to economic policy and reforms in Greece. The crisis in Greece is also a time of opportunity: ambitious reforms can be undertaken that will not only stave off bankruptcy, but also modernize Greece’s economy and raise the productivity and incomes of Greek citizens on a sustainable basis. The articles in this blog aim to offer constructive proposals and impartial analysis of potential, proposed or implemented reforms that are based on the principles of modern economics and on lessons from recent cutting-edge research.

Legal Implications of the Use of Export Taxes in Addressing Carbon Leakage: Competing Border Adjustment Measures

The prevailing uncertainties about the future of the post-Kyoto international legal framework for climate mitigation and adaptation increase the likelihood of unilateral trade interventions that aim to address climate policy concerns, as exemplified by the controversial European Union initiative to include the aviation industry in its emissions trading system. The emerging literature suggests that border carbon adjustment (BCA) measures imposed by importing countries would lead to substantial legal complications in relation to World Trade Organization law and hence to possible trade disputes. Lack of legal clarity on BCAs is exacerbated by potential counter or pre-emptive export restrictions that exporting countries might impose on carbon-intensive products. In this context, this paper investigates the interface between legal and welfare implications of competing unilateral BCA measures. It argues that carbon export taxes will be an inevitable part of the future climate change regime in the absence of a multilateral agreement. It also describes the channels through which competing BCAs may lead to trade conflicts and political complications as a result of their distributional and welfare impacts at the domestic and global levels.

Non-tariff barriers, integration and the transatlantic economy

We examine the potential impact of TTIP through trade-cost reductions, applying a mix of econometric and computational methods to develop estimates of the benefits (and costs) for the EU, United States, and third countries. Econometric results point to an approximate 80% growth in bilateral trade with an ambitious trade agreement. However, at the same time, computable general equilibrium (CGE) estimates highlight distributional impacts across countries and factors not evident from econometrics alone. Translated through our CGE framework, while bilateral trade increases roughly 80%, there is a fall of about 2.5% in trade with the rest of the world in our central case. The estimated gains in annual consumption range between 1% and 2.25% for the United States and EU, respectively. A purely discriminatory agreement would harm most countries outside the agreement, while the direction of third-country effects hinges critically on whether NTB reductions end up being discriminatory or not. Within the United States and EU, while labour gains across skill categories, the impact on farmers is mixed.

Drivers for and against municipal wastewater recycling: a review

The reclamation, treatment and reuse of municipal wastewater can provide important environmental benefits. In this paper, 25 studies on this topic were reviewed and it was found that there are many (\textgreater150) different drivers acting for and against wastewater recycling. To deal with the challenge of comparing studies which entailed different research designs, a framework was developed which allowed the literature to be organized into comparable study contexts. Studies were categorized according to the level of analysis (wastewater recycling scheme, city, water utility, state, country, global) and outcome investigated (development/investment in new schemes, program implementation, percentage of wastewater recycled, percentage of water demand covered by recycled water, multiple outcomes). Findings across comparable case studies were then grouped according to the type (for or against recycling) and category of driver (social, natural, technical, economic, policy or business). The utility of the framework is demonstrated by summarizing the findings from four Australian studies at the city level. The framework offers a unique approach for disentangling the broad range of potential drivers for and against water recycling and to focus on those that seem relevant in specific study contexts. It may offer a valuable starting point for building hypotheses in future work.

The Potential of Tariff Policy for Climate Change Mitigation: Legal and Economic Analysis

This paper addresses a potential role that tariffs and tariff policy can play in encouraging countries to take part in a multilateral effort to mitigate climate change. It begins by assessing whether increasing tariffs on products from energy intensive or polluting industries amounts to a violation of WTO rules and whether protectionism in this case can be differentiated from genuine environmental concerns. It then argues that while lowering tariffs for environmental goods can serve as a carrot to promote dissemination of cleaner technologies, tariff deconsolidation is a legitimate stick to encourage polluting countries to move towards an international climate agreement. The paper further explores this view by undertaking a partialequilibrium simulation analysis to examine the impact of a unilateral unit increase in tariffs on the imports of the most carbon-intensive products from countries not committed to climate polices. Our results suggest that the committed importing countries would have to raise their tariffs only slightly to effect a significant decline in the imports of these products from the non-committed countries. For instance, a unit increase in the simple average applied tariffs on the imports of these carbon-intensive products in 2005 from our sample of non-committed exporting countries would reduce the imports of these products by an average 32.6% in Australia, 178% in Canada, 195% in the EU, 271% in Japan and 62% in the US, therebysuggesting the effectiveness of such a measure in pushing countries towards a global climate policy.