The impact of unilateral OECD carbon taxes on the location of aluminium smelting
by Alan S. Manne, Lars Mathiesen
International Journal of Global Energy Issues (IJGEI), Vol. 6, No. 1/2, 1994

Abstract: Aluminium smelting is electricity intensive. Within the OECD region, electricity generation is based largely on fossil fuels, and a carbon tax would have a significant impact on the cost of electricity. Outside the OECD, there are large amounts of additional electricity that could be generated through hydro-electricity or flare gas. If carbon limits were adopted unilaterally by the OECD nations, domestic producers would be at a competitive disadvantage. To quantify these ideas, we have updated a global aluminium trade model constructed at the World Bank during the early 1980s. According to our business-as-usual scenario, there will be a gradual shift toward new sources of production located outside the OECD region. Unilateral OECD carbon restrictions could dramatically accelerate this process.

Online publication date: Wed, 16-Jul-2014

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