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Incorporating GHG Emission Costs in the Economic Appraisal of Projects Supported by State Development Agencies


  • Richard S. J. Tol

    (Economic and Social Research Institute (ESRI))

  • Seán Lyons

    (Economic and Social Research Institute (ESRI))


This paper sets out a methodology for updating an economic appraisal model to ensure that it takes appropriate account of costs arising from greenhouse gas emissions. While the analysis is based on the appraisal model used in Ireland, it should be broadly applicable to circumstances in any EU Member State; indeed, many features will be relevant in any jurisdiction subject to a carbon tax or participating in a carbon permit trading system.

Suggested Citation

  • Richard S. J. Tol & Seán Lyons, 2008. "Incorporating GHG Emission Costs in the Economic Appraisal of Projects Supported by State Development Agencies," Papers WP247, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:wp247

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    References listed on IDEAS

    1. David Pearce, 2003. "The Social Cost of Carbon and its Policy Implications," Oxford Review of Economic Policy, Oxford University Press, vol. 19(3), pages 362-384.
    2. Patrick Criqui, Peter Russ and Daniel Deybe, 2006. "Impacts of Multi-gas Strategies for Greenhouse Gas Emission Abatement: Insights from a Partial Equilibrium Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 251-274.
    3. Tol, Richard S. J., 2005. "The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties," Energy Policy, Elsevier, vol. 33(16), pages 2064-2074, November.
    4. Richard S.J. Tol, 2006. "Multi-Gas Emission Reduction for Climate Change Policy: An Application of Fund," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 235-250.
    5. Kandlikar, Milind, 1995. "The relative role of trace gas emissions in greenhouse abatement policies," Energy Policy, Elsevier, vol. 23(10), pages 879-883, October.
    6. John FitzGerald & Jonathan Hore & Ide Kearney, 2002. "A Model for Forecasting Energy Demand and Greenhouse Gas Emissions in Ireland," Papers WP146, Economic and Social Research Institute (ESRI).
    7. William D. Nordhaus, 2006. "The "Stern Review" on the Economics of Climate Change," NBER Working Papers 12741, National Bureau of Economic Research, Inc.
    8. Richard S. J. Tol & Gary W. Yohe, 2006. "A Review of the Stern Review," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 7(4), pages 233-250, October.
    9. Honohan, Patrick, 1998. "Key issues of Cost-Benefit Methodology for Irish Industrial Policy," Research Series, Economic and Social Research Institute (ESRI), number GRS172.
    10. Samuel Fankhauser, 1994. "The Social Costs of Greenhouse Gas Emissions: An Expected Value Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 157-184.
    11. A. Ellerman & Barbara Buchner, 2008. "Over-Allocation or Abatement? A Preliminary Analysis of the EU ETS Based on the 2005–06 Emissions Data," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(2), pages 267-287, October.
    12. Marc S. Paoletta & Luca Taschini, 2006. "An Econometric Analysis of Emission Trading Allowances," Swiss Finance Institute Research Paper Series 06-26, Swiss Finance Institute.
    13. Richard Schmalensee, 1993. "Comparing Greenhouse Gases for Policy Purposes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 245-256.
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    Cited by:

    1. Malte Grossmann & Ottfried Dietrich, 2012. "Integrated Economic-Hydrologic Assessment of Water Management Options for Regulated Wetlands Under Conditions of Climate Change: A Case Study from the Spreewald (Germany)," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(7), pages 2081-2108, May.

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