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Estimates of the costs of Kyoto: Marrakesh versus the McKibbin-Wilcoxen blueprint

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  • McKibbin, Warwick J.
  • Wilcoxen, Peter J.

Abstract

In this paper we update our earlier estimates of the cost of the Kyoto Protocol using the G-Cubed model, taking into account the new sink allowances from recent negotiations as well as allowing for multiple gases and new land clearing estimates. Rather than comparing this to the original Kyoto Protocol as other studies have done, we compare the estimates from the current Kyoto Protocol to a realistic alternative to the Kyoto Protocol outlined by McKibbin and Wilcoxen ( 1197a, 1997b, 2002). A key part of the comparison between the two alternatives is not to predict exactly what the outcome for emissions reduction might be at a future date under each approach. What we want to focus on is the importance of the inherent uncertainty about the future that should be at the heart of the design of a suatainable climate policy. To show how important uncertainty is to the design of the climate policies, we take two alternative plausible assumptions about a single aspect of the future predictions and compare the two regimes under these alternative assumptions. Since climate change is all about policy making under uncertainty it is important in comparing regimes to explore how the regimes handle aspects of uncertainty as well as the average performance of the regimes. This comparison illustrates a fundamental difference between the Kyoto Protocol and the Blueprint.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 32 (2004)
Issue (Month): 4 (March)
Pages: 467-479

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Handle: RePEc:eee:enepol:v:32:y:2004:i:4:p:467-479

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Web page: http://www.elsevier.com/locate/enpol

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References

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  1. Warwick J. McKibbin & Martin T. Ross & Robert Shackleton & Peter J. Wilcoxen, 1999. "Emissions Trading, Capital Flows and the Kyoto Protocol," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 287-333.
  2. P. Bagnoli & W. J. McKibbin & P. J. Wilcoxen, . "Global Economic Prospects: Medium Term Projections and Structural Change," Discussion Papers 121, Brookings Institution International Economics.
  3. McKibbin, Warwick J. & Wilcoxen, Peter J., 1998. "The theoretical and empirical structure of the G-Cubed model," Economic Modelling, Elsevier, vol. 16(1), pages 123-148, January.
  4. Zhang, ZhongXiang, 2001. "An assessment of the EU proposal for ceilings on the use of Kyoto flexibility mechanisms," Ecological Economics, Elsevier, vol. 37(1), pages 53-69, April.
  5. Andreas Löschel & Zhong Zhang, 2002. "The economic and environmental implications of the US repudiation of the kyoto protocol and the subsequent deals in Bonn and Marrakech," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(4), pages 711-746, December.
  6. ZhongXiang Zhang, 2000. "Estimating the size of the potential market for the Kyoto flexibility mechanisms," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(3), pages 491-521, 09.
  7. M. L. Weitzman, 1973. "Prices vs. Quantities," Working papers 106, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Pizer, William & Newell, Richard, 1998. "Regulating Stock Externalities Under Uncertainty," Discussion Papers dp-99-10-rev, Resources For the Future.
  9. Warwick J. McKibbin, 2004. "Climate Change Policy for India," ASARC Working Papers 2004-03, The Australian National University, Australia South Asia Research Centre.
  10. Hoel, Michael & Karp, Larry, 2001. "Taxes versus Quotas for a Stock Pollutant," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5fx9p7kf, Department of Agricultural & Resource Economics, UC Berkeley.
  11. Richard S.J. Tol, 1999. "Kyoto, Efficiency, and Cost-Effectiveness: Applications of FUND," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 131-156.
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  13. Warwick J. McKibbin & Peter J. Wilcoxen, 2002. "The Role of Economics in Climate Change Policy," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 107-129, Spring.
  14. Warwick J. McKibbin & Peter J. Wilcoxen, 1997. "A Better Way to Slow Global Climate Change," Economics and Environment Network Working Papers 9702, Australian National University, Economics and Environment Network.
  15. Pizer, William, 1997. "Prices vs. Quantities Revisited: The Case of Climate Change," Discussion Papers dp-98-02, Resources For the Future.
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Citations

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Cited by:
  1. McKibbin, Warwick J. & Wilcoxen, Peter J., 2013. "A Global Approach to Energy and the Environment," Handbook of Computable General Equilibrium Modeling, Elsevier.
  2. Sheila M. Olmstead & Robert N. Stavins, 2012. "Three Key Elements of a Post-2012 International Climate Policy Architecture," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 6(1), pages 65-85.
  3. Bryan K. Mignone, 2008. "Technological Scarcity, Compliance Flexibility And The Optimal Time Path Of Emissions Abatement," CAMA Working Papers 2008-36, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  4. Stavins, Robert, 2004. "Can an Effective Global Climate Treaty be Based on Sound Science, Rational Economics, and Pragmatic Politics?," Working Paper Series rwp04-020, Harvard University, John F. Kennedy School of Government.
  5. McKibbin, Warwick J. & Wilcoxen, Peter J., 2009. "Uncertainty and climate change policy design," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 463-477, May.
  6. Olmstead, Sheila M. & Stavins, Robert N., 2009. "An Expanded Three-Part Architecture for Post-2012 International Climate Policy," Working Paper Series rwp09-036, Harvard University, John F. Kennedy School of Government.
  7. Sam Fankhauser & Cameron Hepburn, 2009. "Carbon markets in space and time," Grantham Research Institute on Climate Change and the Environment Working Papers 3, Grantham Research Institute on Climate Change and the Environment.
  8. Catton, Will, 2009. "Dynamic carbon caps. Splitting the bill: A fairer solution post-Kyoto?," Energy Policy, Elsevier, vol. 37(12), pages 5636-5649, December.
  9. Benjamin Jones & Michael Keen & Jon Strand, 2013. "Fiscal implications of climate change," International Tax and Public Finance, Springer, vol. 20(1), pages 29-70, February.
  10. Wei Jin, 2012. "Can Technological Innovation Help China Take on Its Climate Responsibility? A Computable General Equilibrium Analysis," CAMA Working Papers 2012-51, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  11. L. Gustavsson & R. Madlener & H.-F. Hoen & G. Jungmeier & T. Karjalainen & S. KlÖhn & K. Mahapatra & J. Pohjola & B. Solberg & H. Spelter, 2006. "The Role of Wood Material for Greenhouse Gas Mitigation," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 11(5), pages 1097-1127, September.
  12. Cameron Hepburn, 2006. "Regulation by Prices, Quantities, or Both: A Review of Instrument Choice," Oxford Review of Economic Policy, Oxford University Press, vol. 22(2), pages 226-247, Summer.
  13. Mathews, John, 2007. "Seven steps to curb global warming," Energy Policy, Elsevier, vol. 35(8), pages 4247-4259, August.
  14. Samuel Fankhauser & Cameron Hepburn, 2009. "Carbon markets in space and time," LSE Research Online Documents on Economics 37606, London School of Economics and Political Science, LSE Library.
  15. Warwick J. McKibbin & Peter J. Wilcoxen, 2003. "Climate Policy and Uncertainty: The Roles of Adaptation versus Mitigation," Economics and Environment Network Working Papers 0306, Australian National University, Economics and Environment Network.
  16. Bryan K. Mignone, 2008. "Prices In Emissions Permit Markets: The Role Of Investor Foresight And Capital Durability," CAMA Working Papers 2008-31, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

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