A multisector computable general equilibrium model is used to study economic development perspectives in Norway if carbon dioxide emissions were stabilized. The effects discussed include impacts on main macroeconomic indicators and economic growth, sectoral allocation of production, and effects on the market for energy. The impact of pollutants other than carbon dioxide on emissions is assessed along with the related impact on noneconomic welfare. The results indicate that carbon dioxide emissions might be stabilized in Norway without dramatically reducing economic growth. Sectoral allocation effects are much larger. A substantial reduction in emissions to air other than carbon dioxide is found, yielding considerable gains in noneconomic welfare. Copyright 1992 by The editors of the Scandinavian Journal of Economics.
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