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The Synthesis of Bottom-Up and Top-Down Approaches to Climate Policy Modeling: Electric Power Technologies and the Cost of Limiting U.S. CO2 Emissions

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  • Ian Sue Wing

    (Geography Boston University)

Abstract

In the U.S., the bulk of CO2 abatement induced by carbon taxes comes from electric power. This paper incorporates technology detail into the electricity sector of a computable general equilibrium model of the U.S. economy to characterize electric power’s technological margins of adjustment to carbon taxes and to elucidate their general equilibrium effects. Compared to the top-down production function representation of the electricity sector, the technology-rich bottom-up specification produces less abatement at a higher welfare cost, suggesting that bottom-up models do not necessarily generate lower costs of abatement than top-down models. This result is shown to be sensitive to the elasticity with which technologies’ generating capacities adjust to relative prices

Suggested Citation

  • Ian Sue Wing, 2005. "The Synthesis of Bottom-Up and Top-Down Approaches to Climate Policy Modeling: Electric Power Technologies and the Cost of Limiting U.S. CO2 Emissions," Computing in Economics and Finance 2005 21, Society for Computational Economics.
    • Handle: RePEc:sce:scecf5:21
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    References listed on IDEAS

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    Cited by:

    1. Ian Sue Wing, 2000. "Limiting CO2 Emissions in a Federal System: Understanding and Mitigating the Cost of U.S. Climate Policy At the State Level," Regional and Urban Modeling 283600093, EcoMod.

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    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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