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PPP-correction of the IPCC emission scenarios - does it matter?




Ian Castles and David Henderson have criticized IPCC's Special Report on Emissions Scenarios (SRES) (IPCC, 2000) for using market exchange rates (MER) instead of purchasing power parities (PPP) when converting regional GDP into a common denominator. The consequence is that poor countries generally appear to be poorer than they actually are. An overstated income gap between rich and poor countries in the base year gives rise to projections of too high economic growth in the poor countries because the scenarios are constructed with the aim of reducing the income gap. Castles and Henderson claim that overstated economic growth means that greenhouse gas emissions are overstated as well. However, because closure of the emission intensity gap between the rich and the poor parts of the world is another important driving force in the scenarios, we argue that the use of MER in the SRES scenarios has not caused an overestimation of the global emission growth because the two types of errors effectively neutralize one another.

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  • Bjart J. Holtsmark & Knut H. Alfsen, 2004. "PPP-correction of the IPCC emission scenarios - does it matter?," Discussion Papers 366, Statistics Norway, Research Department.
  • Handle: RePEc:ssb:dispap:366

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    References listed on IDEAS

    1. Nebojsa Nakicenovic & Arnulf Grübler & Stuard Gaffin & Tae Tong Jung & Tom Kram & Tsuneyuki Morita & Hugh Pitcher & Keywan Riahi & Michael Schlesinger & P. R. Shukla & Detlef van Vuuren & Ged Davis &, 2003. "IPCC Sres Revisited: A Response," Energy & Environment, , vol. 14(2), pages 187-214, May.
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    Cited by:

    1. Bjart Holtsmark, 2005. "Global per capita CO2 emissions - stable in the long run?," Discussion Papers 438, Statistics Norway, Research Department.
    2. Calzadilla, Alvaro, 2010. "Global income distribution and poverty: Implications from the IPCC SRES scenarios," Kiel Working Papers 1664, Kiel Institute for the World Economy (IfW).
    3. McKibbin, Warwick J. & Pearce, David & Stegman, Alison, 2007. "Long term projections of carbon emissions," International Journal of Forecasting, Elsevier, vol. 23(4), pages 637-653.

    More about this item


    Global warming; Emission scenarios; IPCC; PPP.;

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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