Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/43523 
Year of Publication: 
2010
Series/Report no.: 
Nota di Lavoro No. 2010,19
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
This paper argues for introducing the role of capital malleability into the analysis of environmental policies. The issue is explored by means of a theoretical model, a numerical analysis and a computable general equilibrium (CGE) model. Considering the three approaches together is fundamental in obtaining theory-compatible policy-relevant results. The model outcomes reveal differences between results under separate assumptions regarding the malleability of capital. When capital is imperfectly malleable a carbon policy is less effective than under the assumption of perfect malleability of capital. Therefore, it is important that, especially for the analysis of short-term environmental regulations, the issue of capital malleability is taken into consideration.
Subjects: 
General Equilibrium
CGE Models
Climate Change Policy
JEL: 
C68
D58
H22
Q43
Document Type: 
Working Paper

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