Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71880
Authors: 
Paulus, Moritz
Trueby, Johannes
Year of Publication: 
2010
Series/Report no.: 
EWI Working Paper 10/04
Abstract: 
In this work we demonstrate the effects of different Chinese transport infrastructure investment strategies on long run marginal costs of steam coal supply in Europe. Increasing Chinese demand for steam coal will lead to a growing need for additional domestic infrastructure in China as production hubs and demand centers are spatially separated. If domestic transport capacity is only available at elevated costs, Chinese power generators could turn to the global trade markets and increase steam coal imports. Increased Chinese imports could significantly influence global trade market price levels which would especially affect nations mainly relying on imports, like for example Europe. We analyze the scope of this effect under different assumptions for Chinese transport infrastructure developments. For this purpose, we develop a spatial equilibrium model for the global steam coal market. For our assumption regarding production and transport cost evolutions, we rely on an input factor-based cost calculation methodology. We find out that the investigated Chinese infrastructure decisions have a modest impact on long run marginal costs of supply for Europe and the US but significant effects for China.
Subjects: 
Steam coal
MCP
non-linear optimization
China
Europe
transport infrastructure
JEL: 
L94
L92
C61
Q30
Document Type: 
Working Paper

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