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Estimates of the Costs of Kyoto-Marrakesh versus the McKibbin-Wilcoxen Blueprint

Author

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  • Warwick J. McKibbin

    () (Australian National University, Research School of Pacific and Asian Studies, Economics Division
    The Brookings Institution)

  • Peter J. Wilcoxen

    (University of Texas, Economics Department
    The Brookings Institution)

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.

Suggested Citation

  • Warwick J. McKibbin & Peter J. Wilcoxen, 2003. "Estimates of the Costs of Kyoto-Marrakesh versus the McKibbin-Wilcoxen Blueprint," Economics and Environment Network Working Papers 0305, Australian National University, Economics and Environment Network.
  • Handle: RePEc:anu:eenwps:0305
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. Benjamin Jones & Michael Keen & Jon Strand, 2013. "Fiscal implications of climate change," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(1), pages 29-70, February.
    5. 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.
    6. Fankhauser, Samuel & Hepburn, Cameron, 2009. "Carbon markets in space and time," LSE Research Online Documents on Economics 37606, London School of Economics and Political Science, LSE Library.
    7. Mathews, John, 2007. "Seven steps to curb global warming," Energy Policy, Elsevier, vol. 35(8), pages 4247-4259, August.
    8. 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.
    9. Catton, Will, 2009. "Dynamic carbon caps. Splitting the bill: A fairer solution post-Kyoto?," Energy Policy, Elsevier, vol. 37(12), pages 5636-5649, December.
    10. Stavins, Robert, 2004. "Can an Effective Global Climate Treaty Be Based on Sound Science, Rational Economics, and Pragmatic Politics?," Discussion Papers dp-04-28, Resources For the Future.
    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. McKibbin, Warwick J. & Wilcoxen, Peter J., 2013. "A Global Approach to Energy and the Environment," Handbook of Computable General Equilibrium Modeling, Elsevier.
    13. Marco Grasso, 2004. "Climate change: the global public good," Working Papers 75, University of Milano-Bicocca, Department of Economics, revised May 2004.
    14. 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.
    15. 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.
    16. 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.

    More about this item

    Keywords

    climate change; Kyoto; blueprint; uncertainty; policy;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General

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