Climate policy impacts on the competitiveness of energy-intensive manufacturing sectors

This study examines the impacts of energy price changes resulting from different carbon-pricing policies on the competitiveness of selected US energy-intensive industries. It further examines possible industry responses, and identifies and provides a preliminary evaluation of potential opportunities...

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Bibliographic Details
Published in:Energy policy 2009-08, Vol.37 (8), p.3052-3060
Main Authors: Bassi, Andrea M., Yudken, Joel S., Ruth, Matthias
Format: Article
Language:English
Subjects:
Applied sciences
Carbon
Climate policy
Competition
Competitiveness
Economic data
Economics
Energy
Energy economics
Energy policy
Energy policy Industry model Climate policy
Energy utilization
Environmental policy
Exact sciences and technology
General aspects
General, economic and professional studies
Impact analysis
Industrial policy
Industrial production
Industry model
Manufacturers
Studies
Technology adoption
U.S.A
US imports
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Summary:This study examines the impacts of energy price changes resulting from different carbon-pricing policies on the competitiveness of selected US energy-intensive industries. It further examines possible industry responses, and identifies and provides a preliminary evaluation of potential opportunities to mitigate these impacts. The industry sectors investigated – steel, aluminum, chemicals and paper – are among the largest industrial users of fossil fuels in the US economy. The results of this examination show that climate policies that put a price on carbon could have substantial impacts on the competitiveness of US energy-intensive manufacturing sectors over the next two decades, if climate regulations are applied only in the United States, and no action is taken to invest in advanced low- and no-carbon technologies. The extent of these impacts will vary across industries, depending on their energy intensities, the mix of energy sources they rely on and how energy is used in production activities (heat and power, feedstock). Of relevance is also the speed and rigor with which industries adopt new technologies and retire (or replace) old ones. Other factors affecting these impacts include an industry's vulnerability to foreign imports and its ability to pass through cost increases to its customers in the face of international market competition.
ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2009.03.055