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Estimating the impact of emission reduction target-setting on the macroeconomy

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  • Akira Maeda

Abstract

In recent times, greenhouse gas (GHG) reduction targets have been frequently discussed in climate-change policy debates. Computable energy-economic models have played a significant role in the process of formulating policy goals. However, these models are very complicated and contain many ad hoc parameters that may be unclear to policy makers. The purpose of this article is to explore how the elasticity parameters between carbon-based inputs and other inputs play significant roles in estimating the impacts of GHG reduction targets on both the GDP and carbon prices required for achieving the target. Further, it discusses the implications of using ad hoc parameters for climate-change policy making. The analysis is expected to contribute to creating a sound procedure for climate-change policy making. Copyright Springer Japan 2014

Suggested Citation

  • Akira Maeda, 2014. "Estimating the impact of emission reduction target-setting on the macroeconomy," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(4), pages 381-395, October.
    • Handle: RePEc:spr:envpol:v:16:y:2014:i:4:p:381-395
    DOI: 10.1007/s10018-013-0062-x
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    References listed on IDEAS

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    1. Lau, Morten I. & Pahlke, Andreas & Rutherford, Thomas F., 2002. "Approximating infinite-horizon models in a complementarity format: A primer in dynamic general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 26(4), pages 577-609, April.
    2. Alan Manne & Richard Richels, 1992. "Buying Greenhouse Insurance: The Economic Costs of CO2 Emission Limits," MIT Press Books, The MIT Press, edition 1, volume 1, number 026213280x, December.
    3. Akira Maeda, 2008. "On the Oil Price-GDP Relationship," Japanese Economy, Taylor & Francis Journals, vol. 35(1), pages 99-127.
    4. Jean-Marc Burniaux & John P. Martin & Giuseppe Nicoletti & Joaquim Oliveira Martins, 1992. "GREEN a Multi-Sector, Multi-Region General Equilibrium Model for Quantifying the Costs of Curbing CO2 Emissions: A Technical Manual," OECD Economics Department Working Papers 116, OECD Publishing.
    5. Jean-Marc Burniaux & Jean Château, 2008. "An Overview of the OECD ENV-Linkages Model," OECD Economics Department Working Papers 653, OECD Publishing.
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    Cited by:

    1. Omid Sabbaghi & Navid Sabbaghi, 2017. "The Chicago Climate Exchange and market efficiency: an empirical analysis," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(4), pages 711-734, October.
    2. Song, Malin & Zhu, Shuai & Wang, Jianlin & Zhao, Jiajia, 2020. "Share green growth: Regional evaluation of green output performance in China," International Journal of Production Economics, Elsevier, vol. 219(C), pages 152-163.

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    More about this item

    Keywords

    Climate-change policy; Greenhouse gas reduction; Computable general equilibrium analysis; Elasticity of substitution; C68; Q43; Q58;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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