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The Kyoto Protocol: An Economic Analysis Using GTEM

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  • Vivek Tulpule
  • Stephen Brown
  • Jaekyu Lim
  • Cain Polidano
  • Horn Pant
  • Brian S. Fisher

Abstract

In this paper ABARE's Global Trade and Environment Model (GTEM) is used to analyse the potential of international emissions trading as a mechanism for helping to achieve the abatement commitments agreed to in the Kyoto Protocol. The prospect of two emission trading blocs, one consisting of the European Union and eastern Europe and the other consisting of many of the remaining Annex I regions, is also considered. The analysis shows that the carbon penalty varies significantly across regions when no emissions trading is allowed. In aggregate, the cost of abatement to Annex I regions falls with emissions trading.Under the assumption of the two trading blocs, the carbon penalty in the European bloc is higher than with full Annex I trading. The paper also considers the impact on developing countries and the role of carbon leakage in determining the economic impacts on Annex I regions.

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Bibliographic Info

Article provided by International Association for Energy Economics in its journal The Energy Journal.

Volume (Year): Volume 20 (1999)
Issue (Month): Special Issue ()
Pages: 257-285

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Handle: RePEc:aen:journl:1999si-a11

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Cited by:
  1. Adriaan Perrels, 2000. "Greenhouse Gas Policy Questions and Socio-economic Research Implications for Finland in a National and International Context," Discussion Papers 222, Government Institute for Economic Research Finland (VATT).
  2. Claudia Kemfert & Wietze Lise & Richard Tol, 2004. "Games of Climate Change with International Trade," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 28(2), pages 209-232, June.
  3. Matti Liski & Juha Virrankoski, 2004. "Frictions in Project-Based Supply of Permits," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 28(3), pages 347-365, July.
  4. Alfred Endres & Cornelia Ohl, 2005. "Kyoto, Europe?—An Economic Evaluation of the European Emission Trading Directive," European Journal of Law and Economics, Springer, vol. 19(1), pages 17-39, January.
  5. Springer, Urs, 2003. "The market for tradable GHG permits under the Kyoto Protocol: a survey of model studies," Energy Economics, Elsevier, vol. 25(5), pages 527-551, September.
  6. Fischer, Carolyn & Morgenstern, Richard, 2003. "Carbon Abatement Costs: Why the Wide Range of Estimates?," Discussion Papers dp-03-42-rev, Resources For the Future.
  7. Stephen P.A. Brown & Hillard G. Huntington, 2003. "Terms of trade and OECD policies to mitigate global climate change," Economic and Financial Policy Review, Federal Reserve Bank of Dallas.
  8. Adams, Philip D. & Parmenter, Brian R., 2013. "Computable General Equilibrium Modeling of Environmental Issues in Australia," Handbook of Computable General Equilibrium Modeling, Elsevier.
  9. Bohringer, Christoph & Loschel, Andreas, 2006. "Computable general equilibrium models for sustainability impact assessment: Status quo and prospects," Ecological Economics, Elsevier, vol. 60(1), pages 49-64, November.

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