Published in:IC4R | İstanbul Center for Regulation, Report Series ; No.1 (2022)
Extent:
1 Online-Ressource (39 p)
Language:
English
DOI:
10.2139/ssrn.4250459
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 2022 erstellt
Description:
As has been amply documented by science and validated by the Intergovernmental Panel on Climate Change, global warming is a reality. In response to global warming, the interna- tional community has devised ambitious policies that are enshrined in the Kyoto Protocol and most recently, in the Paris Agreement. Most of the countries, including Turkey, have signed on to the Paris Agreement, signaling their willingness to take responsibility vis-à-vis the international community and future generations. Turkey has furthermore defined and communicated its Intended Nationally Determined Contributions to this collective effort. It is legitimate for a country like Turkey to assess how it can realistically meet its Intended Nationally Determined Contributions. This is where the present study comes in. Our study aims to quantify the economic costs and impacts of possible climate mitigation policies. This will help Turkey decide which policy and policy mix best fits its needs, while at the same time meeting its global responsibility. While the study indicates possible options for Turkish policymakers, its main contribution lies in its underlying model, which makes it possible to simulate many more options than the ones outlined in this document. Thanks to our model, we can perform multiple simulations for the 2021-2050 period to analyze the effects of different policies on main economic aggregates such as GDP, employment, emissions, and demand for different energy types. We study the effect of various carbon taxes based on for two different tax policies: (1) taxes become effective in the next year, and (2) taxes become effective in five years. We then analyze the effects of a subsidy on renewable energy implemented with carbon taxes on all polluting energy types. Our model is also capable of showing the effects of exogenous shocks on the economy. In that context, we examine the economy’s behavior in response to changes in total factor productivity and changes in the international prices of oil and natural gas. The following section presents Turkey’s emissions’ structure in international comparison. Section 3 discusses state-of-the-art policy measures to mitigate global warming and ex- plains the choice of a combined carbon tax and subsidies for renewables. Section 4 discusses and assesses the existing studies of the effects of climate change mitigating policy measures on the Turkish economy. Section 5 provides a non-technical summary of the model and states conducted simulations. We present our results in Section 6, before Section 7 concludes and makes recommendations for policymakers in Turkey