Energy and economic impacts of the global climate change policy on Southeast Asian countries: A general equilibrium analysis

The universal climate agreement is expected to be concluded in 2015 at 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris. Importantly, developing countries, who were not part of Kyoto Mechanisms, are expected to be part of new global regime in some meaningful ways. The move comes as countries all over the world are just starting to put together their national pledges, either voluntary activities of emissions mitigation or legally-binding reduction targets, in 2015 for implementation by 2020. Moreover, past assessments of mitigation costs, that all Southeast Asian countries representing in a disaggregated way would face under a global climate change regime, are rare. In this context, a dynamic computable general equilibrium model of the global economy is developed in this study and extended with a bottom-up representation of electricity generation technologies to analyze the energy and economic consequences in Southeast Asian countries under the uncertain global climate constraints. The results highlight the impacts of Southeast Asian nations when non-Annex I countries play a gap-filling role to achieve the long-term 2°C goal in the global climate agreements. We find that clean electricity generation technologies play a key role in emissions reductions, as well as provide positive impacts to economy under the stringent emissions caps. Thailand and Vietnam will have the most severe impacts in Southeast Asia across the climate policy scenarios. Lastly, negotiations for pushing very stringent pledged targets on Annex I countries does not guarantee benefits for Southeast Asia due to the increasing decline in export revenues under more stringent mitigation targets in Annex I nations.