Economic implications of moving toward global convergence on emission intensities
AbstractOne key contentious issue in climate change negotiations is the huge difference in carbon dioxide (CO2) emissions per capita between more advanced industrialized countries and other nations. This paper analyzes the costs of reducing this gap. Simulations using a global computable general equilibrium model show that the average the carbon dioxide intensity of advanced industrialized countries would remain almost twice as high as the average for other countries in 2030, even if the former group adopted a heavy uniform carbon tax of $250/tCO2 that reduced their emissions by 57 percent from the baseline. Global emissions would fall only 18 percent, due to an increase in emissions in the other countries. This reduction may not be adequate to move toward 2050 emission levels that avoid dangerous climate change. The tax would reduce Annex I countries'gross domestic product by 2.4 percent, and global trade volume by 2 percent. The economic costs of the tax vary significantly across countries, with heavier burdens on fossil fuel intensive economies such as Russia, Australia, the United Kingdom and the United States.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 6115.
Date of creation: 01 Jul 2012
Date of revision:
Climate Change Mitigation and Green House Gases; Environment and Energy Efficiency; Climate Change Economics; Energy and Environment; Carbon Policy and Trading;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-14 (All new papers)
- NEP-CIS-2012-07-14 (Confederation of Independent States)
- NEP-ENE-2012-07-14 (Energy Economics)
- NEP-ENV-2012-07-14 (Environmental Economics)
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