The economic impact of EU’s climate policy by 2020 (in Finnish with English abstract)

Olavi Rantala — Tue, 27 Nov 2012 14:07:24 +0000

Abstract: The study evaluates the impacts of EU climate policy on emission allowance price, electricity prices, the competitiveness of industry and macroeconomic developments in the third EU emission trading period 2013-2020. The economic impacts of climate policy on Finland are compared to the impacts on the entire EU area. It turns out that due to the cold climate and heating energy demand, higher export intensity of the economy and higher energy intensity of the industry Finland pays a higher price in terms of output and employment losses for the EU’s climate policy than the EU on average. The study examines the macroeconomic effects of climate policy also in a more distant future, assuming that climate policy is tightened further in the 2020s. Climate policy implemented by emission trading means that the long-term economic growth in the EU area depends essentially on emission-free electricity production, and no longer on other growth factors, such as labour supply and productivity growth.

Publication year: 2012
Pages: 48 p.
Price: 15 €
Language: Finnish

ETLA Raportit – ETLA Reports No 2
ISSN 2323-2455

Determinants for Foreign Direct Investment in the Baltic Sea Region

Markku Kotilainen — Tue, 06 Nov 2012 08:14:21 +0000

Abstract: We have defined the Baltic Sea Region as consisting of the following countries: Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Sweden, and Russia. We investigate foreign direct investment (FDI) flows from 1995 to 2010 to these countries econometrically. We use two basic models: the first one treats aggregate FDI inflows by countries, and the second focuses on bilateral FDI flows between country pairs. Because of limitations in data availability, the second model is built for a smaller group of countries. In this model we take into account the origin country of the FDI. Our results show that macroeconomic factors such as corporate taxes are important determinants for FDI flows. We notice that these factors and their effects vary between the Baltic Sea Region countries. Foreign trade with the investing country is also a statistically significant determinant for FDI, i.e. the countries that have trade with each other also invest in each other. On the other hand distance between countries doesn’t explain FDI flows. Institutional factors such as EU membership or a common currency are not statistically significant in our estimations but this could be because of data limitations and because of the fact that these changes in countries’ international status are incorporated in the other variables and are also foreseen by the investors.

JEL: F21, F23, F13, F15
Publication year: 2012
Pages: 37 p.
Price: 15 €
Language: English

ETLA Raportit – Reports No 1
ISSN 2323 – 2455

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The economic impact of EU’s climate policy by 2020 (in Finnish with English abstract)

Determinants for Foreign Direct Investment in the Baltic Sea Region