Analysis of the effect of energy and environmental policy on international trade

The project aims at suggesting policies to protect vulnerable consumers while enhancing energy security and protecting the environment. Therefore, it is necessary to provide policymakers with essential information on efficacy and distributional impact of energy-related policies. Any effective environmental policy – leading to a change in household and firm behaviour – has, besides the primary goal, several effects at national and international level. Production, international trade, consumption and household disposable income, especially for vulnerable households can be greatly affected by a change of energy regulation or relative prices on international markets.

Therefore, the empirical investigation of international effects of policies is an interesting and politically relevant issue.  We intend to use a Bilateral Trade Model (BTM) developed by the proponent to assess the impact of energy and fiscal policies in a multi-country setting. Results of the microsimulation analysis carried out in the previous activity will be linked with the BTM to estimate the spillover effects at the macroeconomic level through international trade.