The Economic Implications of Eliminating Coal Subsidies in G7 Countries

Authors

Rachel M. Kim, University of Toronto SchoolsFollow
Pradnaya S. Pathak, University of Toronto SchoolsFollow

Abstract

This paper analyzes the economic implications of eliminating coal subsidies in G7 countries (Canada, France, Germany, Italy, Japan, United Kingdom, United States) in light of the Paris Agreement and the 2009 commitment to addressing climate change. The study uses a computable general equilibrium (CGE) model and contains three different simulations: production subsidy removal, consumption subsidy removal, and both consumption and production subsidy removal in G7 nations. Three variables were analyzed: economic welfare, market price, and output quantity. The results obtained using the Global Trade Analysis Project (GTAP) indicate that coal price increases and output quantity decreases, while economic welfare varies.

Recommended Citation

Kim, Rachel M. and Pathak, Pradnaya S. (2019) "The Economic Implications of Eliminating Coal Subsidies in G7 Countries," Undergraduate Economic Review: Vol. 16: Iss. 1, Article 23.
Available at: https://digitalcommons.iwu.edu/uer/vol16/iss1/23