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Climate Policy Without Tears: CGE-Based Ancillary Benefits Estimates for Chile

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  • Sébastien Dessus
  • David O’Connor

Abstract

What interest do developing countries have in limiting the growth of their greenhouse gas (GHG) emissions? Answering this question is crucial to moving international climate policy negotiations forward. The primary benefits for individual countries of GHG abatement remain highly uncertain and, in any case, long-term in nature. The costs, on the other hand, are near-term.Using an economy-wide model of Chile, this study examines a hitherto neglected set of benefits from climate policy, viz., the reduction in emissions of local and regional air pollutants and the “ancillary” health benefits, in this case for the people of Santiago, the capital city. These benefits are both near-term and readily captured by the country implementing the policy. Extensive sensitivity analysis is performed in recognition of the uncertainty surrounding certain key parameter and exogenous variable values — notably, Santiago residents’ willingness to pay (WTP) for reduced mortality and morbidity risk, and ... Quel intérêt pourraient avoir les pays en développement à limiter leurs émissions de gaz à effet de serre ? De la réponse à cette question dépend en partie la poursuite des négociations internationales sur la question. Les gains attendus pour chaque pays d’une limitation des gaz à effet de serre restent en effet encore très hypothétiques, et d’horizon lointain. Les coûts, en revanche, sont immédiats.Cette étude tente d’estimer, à l’aide d’un modèle d’équilibre général calculable pour le Chili, le bénéfice souvent négligé d’une politique de contrôle des émissions pour la qualité de l’air à Santiago du Chili, et ses effets associés sur la santé de ses habitants. Les pays adoptant ces politiques peuvent en retirer les bénéfices directement et à court terme. Une large analyse de sensibilité est menée, en raison des incertitudes qui pèsent sur la valeur de certains paramètres clefs. Elle concerne notamment le montant que seraient prêts à payer les habitants de Santiago pour voir ...

Suggested Citation

  • Sébastien Dessus & David O’Connor, 1999. "Climate Policy Without Tears: CGE-Based Ancillary Benefits Estimates for Chile," OECD Development Centre Working Papers 156, OECD Publishing.
  • Handle: RePEc:oec:devaaa:156-en
    DOI: 10.1787/255872588381
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    1. John C. Beghin & Sebastien Dessus, 1999. "Double Dividend with Trade Distortions: Analytical Results and Evidence from Chile," Center for Agricultural and Rural Development (CARD) Publications 99-wp225, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    7. Alberini, Anna & Cropper, Maureen & Fu, Tsu-Tan & Krupnick, Alan & Liu, Jin-Tan & Shaw, Daigee & Harrington, Winston, 1997. "Valuing Health Effects of Air Pollution in Developing Countries: The Case of Taiwan," Journal of Environmental Economics and Management, Elsevier, vol. 34(2), pages 107-126, October.
    8. John Beghin & Sébastien Dessus & David Roland-Holst & Dominique van der Mensbrugghe, 1996. "General Equilibrium Modelling of Trade and the Environment," OECD Development Centre Working Papers 116, OECD Publishing.
    9. O'Ryan, Raul E., 1996. "Cost-Effective Policies to Improve Urban Air Quality in Santiago, Chile," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 302-313, November.
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    11. Liu, Jin-Tan & Hammitt, James K. & Liu, Jin-Long, 1997. "Estimated hedonic wage function and value of life in a developing country," Economics Letters, Elsevier, vol. 57(3), pages 353-358, December.
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