Climate change policies and macroeconomic modeling: a general equilibrium model for the Belgian economy.

Summary The purpose of this thesis is to design an applied model that ensures a maximum adequacy with the problem of reducing greenhouse gas emissions and the economic policy instruments envisaged in the framework of the Kyoto Protocol, essentially tradable emission permits. This model shows that a system of permits would make it possible to reduce GHG emissions with significantly lower losses in terms of activity and well-being than in the case of a CO2/energy tax. The combination of permits with fiscal instruments is unable to generate welfare improvements, even if the negative impacts on the macroeconomy can be mitigated. One of the most effective strategies is to offset the extra cost of imposing emission allowances on firms by reducing their wage costs. only reductions targeted at low-wage workers can generate a double dividend in terms of employment. Finally, based on a bottom-up approach, new technologies were introduced into the model in order to test their contribution to the compliance with emission allowances and their influence on the permit market. The thesis focused on analyzing the mechanisms inherent to intra-temporal flexibility. It is likely that future explorations will focus on the analysis of inter-temporal flexibility, which requires the construction of a dynamic model, but also some assumptions or information on how the permit market works in reality. Finally, it would be interesting to introduce mechanisms of imperfect competition, notably in the functioning of the labor market, but also (and especially) in the permit market. Here again, additional information will be needed to know the practical rules of operation of this market.