The Russia–Ukraine conflict lays bare the dependence of the European Union (EU) on fossil fuel imports from Russia. Here, we use a global computable general equilibrium model, C3IAM/GEEPA, to estimate CO2 emission and gross domestic product (GDP) impact of embargoing fossil fuels from Russia. We find that embargoes induce more than 10% reduction of CO2 emissions in the EU and slight increases of emissions in Russia, while both regions experience GDP losses (around 2% for the EU and about 5% for Russia, ignoring the relative impact of other sanctions). Reacting to increasing energy prices with demand-side response inside the EU would increase CO2 emission savings, while turning GDP losses into gains. Implementing a partial embargo with tariffs largely compensates for lost government revenue.
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The data that support the plots within this paper and other findings of this study are available from the corresponding authors upon reasonable request.
The codes that support the methods of this study are available from the corresponding authors upon reasonable request.
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We gratefully acknowledge the financial support of the National Natural Science Foundation of China (grant nos. 72074022, 72104022, 72293600 and 72204234). We thank our colleagues for their support and acknowledge help from CEEP-BIT.
The authors declare no competing interests.
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Extended Data Fig. 1 The framework of C3IAM/GEEPA.
C3IAM/GEEPA is a multiregional recursive dynamic computable general equilibrium (CGE) model, which is composed of production, income/expenditure, investment and foreign trade. When producing one commodity, labour, capital, energy and other intermediate products are all inputs in each sector, which are assumed to follow a nested constant elasticity of substitute (CES) function. Household income mainly comes from labour income and capital returns; Government income is composed of tariff, indirect tax, household income tax and transfers from other countries/regions. C3IAM/GEEPA adopts Armington assumption, assuming there is imperfect substitutability between imports and domestic output sold domestically. The commodity that supplied domestically is composed of domestic and imported commodities following a CES function. A constant elasticity transformation (CET) function is used to allocate total domestic output between exports and domestic sales. The commodity, capital, and labour markets are cleared in C3IAM/GEEPA. The model adopts the recursive dynamic mechanism and is pushed forward through capital accumulation, population growth, and improvement of total factor productivity.
Supplementary Results (1 and 2), uncertainty analysis (3 and 4) and model introduction (5 and 6).
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Liu, LJ., Jiang, HD., Liang, QM. et al. Carbon emissions and economic impacts of an EU embargo on Russian fossil fuels. Nat. Clim. Chang. 13, 290–296 (2023). https://doi.org/10.1038/s41558-023-01606-7