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Static Eficiency
This argument is related to the positive allocative effects caused by trade.
The argument is fundamentally dependent on the assumption of differences in
the marginal reduction costs between countries in a well-defined market. This
might lead to gains arising from trade for both sides. Trade reduces the overall
costs of compliance with any specified set of internationally accepted reduction
targets. Lile et al. (1999) and Edmonds et al. (1996) find the rationale for
Annex I countries is that reduction costs in developing countries are much lower
than their own. Ellerman et al. (1998) and Holtsmark and Hagem (1998) arrive
at similar conclusions. However, some bottom-up, project-based country studies
that quantify national mitigation-cost curves and the consequences (e.g., Jackson
(1995); EC 1999)) identify lower mitigation costs in developed countries and
thus smaller cost differences internationally. Table 10.8
gives studies on the costs of Kyoto targets under different flexibility arrangements.
Table 10.8: Studies on costs of Kyoto targets under
different grades of where-flexibility In this table the essential results (welfare implications) are presented with respect to achieving the Kyoto targets under different institutional seetings for the use of flexibility instruments. The following features are summarized in the table: 1. Reference and year of publication; footnote says where the reference is available 2. Welfare measure and scenario; the scenarios are not all with respect to the Kyoto-targets and the welfare measure is not the same in all studies 3. Different grades of where-flexibility 4. Comments on the study summarizes the most important features of the models used for the study. |
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Study | Welfare measure and scenario | Different grades | Comments | ||||||||
No trade | Double-bubble23 | Less than A1 trade24 | x%-Cap25 | Annex 1 trade | More than A1 trade26 | A 1 trade +CDM | Full/global trade | ||||
McKibbin, Shackelton and Wilcoxen (1999) | %-change of GNP per region
in 2010; not Kyoto: Stab. at 1990 level |
USA: -.5 Jap: -.1 Aus: -2.2 OtherOECD (OOECD): -1.2 |
OECD USA: -.5 Jap: -.3 Aus: -1.5 OOECD: -.9 gain $90 bil27 US-unilateral reduction: -.6 |
G-Cubed(Global General Equilibrium Growth Model), fossil fuels only; with monetary effects, no no-regret, 8 regions, 12 sectors, no terms of trade, capital flows, 1995$ | |||||||
McKibbin, Shackelton and Wilcoxen (1998) | %-change of GNP per region in 2010; not Kyoto: Stab. at 1990 level |
USA:-.3 Jap:-.8 Aus:-2.5 OOECD:-1.4 Chi:0 LDC:+2.7 |
USA:+.1 Jap:-.1 Aus:-1.3 OOECD:-1.2 Chi:0 LDC:+1.8 |
USA:-.2 Jap:-.2 Aus:-2 OOECD:-.5 Chi:0 LDC:+1.4 |
USA:0 Jap:0 Aus:-.7 OOECD:-.2 Chi:-.5 LDC:+.228 |
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McKibbin, Ross, Shackelton and Wilcoxen (1999) | %-change of GNP per Region
in 2010; not Kyoto: Stab. at 1990 level |
USA:-.6 Jap:-.5 Aus:-1.6 OOECD:-1.3 Chi:-.1 LDC:+.7 |
USA:-.5 Jap:-.4 Aus:-.8 OOECD:-.6 Chi:-.1 LDC:+.7 |
USA:-.2 Jap:-.1 Aus:-.4 OOECD:-.2 Chi:-.4 LDC:0 |
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Bernstein, Montgomery, Rutherford and Yang (1999) | Hicks Equivalent Variation (HEV), %-change from baseline per region, Protocol costs | USA: -.5 Jap: -.6 EU15: -.4 OOE: -1. SEA: -.2 OAS: .1 Chi: +.3 FSU: -.4 MPC: -1.4 ROW: -.1 |
US: -.25 Jap: - .25 EU15: -.25 OOE: -.75 SEA: 0 OAS: 0 Chi: +.3 FSU: +4.4 MPC: -1.1 ROW: -.1 |
US: -.2 Jap: 0 EU15 -.1 OOE: -.4 SEA: +.25 OAS: +.2 Chi: +.25 FSU: -.4 MPC: -.3 ROW: 0 |
MS-MRT (Multi-sectoral, multi-regional General Equilibrium Model) (GEM), terms-of-trade, capital flows, leakage, 10 regions, 5 energy, 4 non-energy sectors, 1995$ | ||||||
Bernstein, Montgomery and Rutherford (1999) | HEV | US:-.56 Jap:-.64 EU:-.45 OOE:-.92 SEA:-.18 OAS:-.1 Chi:+.34 FSU:-.42 MPC:-1.39 ROW:-.1 |
US:-.43 Jap:-.52 EU:-.33 OOE:-.78 SEA:-.13 OAS:-.08 Chi:+.31 FSU:+.05 MPC:-1.26 ROW:-.0829 |
US:-.36 Jap:-.23 EU:-.25 OOE:-.76 SEA:-.04 OAS:-.01 Chi:+.22 FSU:+4.44 MPC:-1.15 ROW:-.08 |
US:-.32 Jap:-.18 EU:-.20 OOE:-.67 SEA:+.06 OAS:+.09 Chi:+.55 FSU:+3.47 MPC:-.92 ROW:+.0130 |
US:-.14 Jap:-.03 EU:-.05 OOE:-.3 SEA:+.25 OAS:+.19 Chi:+.34 FSU:+.48 MPC:-.36 ROW:+.03 |
MS-MRT GEM, GTAP4 Database, 10 regions, 3 fuels and electrical sectors, 2 goods | ||||
US:-.34 Jap:-.31 EU:-.25 OOE:-.71 SEA:-.07 OAS:-.05 Chi:+.25 FSU:+2.18 MPC:-1.17 ROW:-.08 |
Annex-I B30: 30% ceiling for buyers; this restricts imports of TP | ||||||||||
Annex-I B50: 50% ceiling for buyers; this restricts imports of TP | |||||||||||
Annex-I S50: 50% ceiling for sellers; this restricts exports of TP | |||||||||||
No Hot Air: The QUELRCS31 for FSU and EE are set to their baseline values | |||||||||||
US:-.35, Jap:-.24 EU:-.24 OOE:-.75 SEA:-.05 OAS:-.02 Chi:+.22 FSU:+4.18 MPC:-1.15 ROW:-.08 |
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US:-.43 Jap:-.30 EU:-.30 OOE:-.80 SEA:-.08 OAS:-.05 Chi:+.23 FSU:+4.57 MPC:-1.15 ROW:-.08 |
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US:-.39 Jap:-.24 EU:-.25 OOE:-.82 SEA:-.02 OAS:.03 Chi:+.26 FSU:+4.27 MPC:-1.23 ROW:-.03 |
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Cooper et al. (1999) | Change in potential output (GDP) in 2010 in % | US:-2.5 (-1.8) Ca:-3.9 Jp:-1.8 (-1.9) Ge:-2.2(-2.4) Fr:-2.2(-2.2) It:-2.3 UK:-1.9 EU:-2.2 Chi:+1.6 Rus:+0.9 |
US:-1.(-.5) Ca:-1. Jap:-.3(-.3) Ger:-2.2(-4.9) Fr:-2.2(-2.2) It:-2.3 UK:-1.8 EU:-2.2 Chi:+.7 Rus:-1.(+2.5 income) |
US:-1.4(-.8) Ca:-1.2 Jap:-.5(-.5) Ger:-.8(-.9) Fr:-.6(-.5) It:-.7 UK:-1. EU:-.7 Chi:+.6 Rus:-1.4 (+4.income) |
Oxford Model, Energybased macroeconomic GEM, 6 fuels, 4 sectors, 22 regions | ||||||
Tulpulé (1998, 1999) | %-loss of GNP | Annex 1: -1.2 Non-Annex I: 0 |
Annex I: -.3 Non-Annex I: 0 |
Annex I: -.3 Non-Annex I: 0 |
GTEM, GTAP3-database, 19 regions, 16 tradeables, S(y)=j(i), transport costs for trade | ||||||
Brown et al. (1999) | % loss of GNP, global | -.8 | -.2 | GTEM, GTAP 4 database, 18 regions, 23 tradeables, 3 GHG GWP:1,21,310; technological change rising with GHG-penalty, ref-scen = no policy, 1992 $ | |||||||
Böhringer (1999) (CO2 -emissions in bill. tCO2) | HEV, % of BAU income | -.2 (28.51) | -.15 (28.74) | -.04 (29.03) | global GEM, GTAP4 and OECD/ IEA- data, 7 sectors, 11 Regions | ||||||
Manne and Richels (1997) | consumption loss 1990- 2100 discounted with 5% to 1990 in $ | WG1 | 8.7 tril | 5.9 tril | 3.2 tril | ||||||
10% cut in 2010 | 4.4 tril | 2.7 tril | 1.9 tril | ||||||||
WRE | 1.8 tril | 0.9 tril | 0.8 tril | ||||||||
Manne and Richels (1998) | annual US- Costs, 1990 bill. $ in 2010 (2020) | 85 (102) | 51 (77), 15 % of potentials available due to complexities of flexibility instruments | 23 (45) | MERGE 3.0 (model for evaluating the regional and global effects of GHG reduc- tion policies), 9 regions, leakage, Global Trade (GT) non- AI restricted by baseline bounds, | ||||||
Manne and Richels (1999b) | Kyoto Forever => K-constraints through 21 st c. for AI and baseline for NonAI (no leakage); US GDP loss in bil $ | 87 | (a) 55 (b) 61 1/ 3 limitation of satisfying Kyoto obligations by AI- countries |
49 15 % of potential available | 23 | (a) buyers market - sellers are price takers (b) sellers market buyers are price takers |
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Capros (1998) | costs only for regions and not Kyoto targets (15%), EU | * with 15% | POLES for world level, extensive assessment for EU | ||||||||
Holtsmark (1998) | % loss of 1990 GDP per country | USA:+.49 Ca:+.51 EU32 :-.05 DK:+.59 Fin: 0 Swe: 0 Nor:+ 1.36 Rus:+.17 OthEIT:-.07 AuNZ:+.24 Jap:+.09 N-AI:+.91 |
USA:+.48 Ca:+.5 EU:-.07 DK:+.37 Fin: 0 Swe: 0 Nor:+1.22 Rus:+.16 OthEIT:-.07 AuNZ:+.17 Jap:+.08 N- AI:+.46 |
USA:+.4 Ca:+.42 EU:-.04 DK:+.25 Fin: 0 Swe: 0 Nor:+1.26 Rus:-.4 OthEIT:-.27 AuNZ:+.17 Jap:+.07 N-AI:+.42 |
partial & static ACT, strategic OPEC, 3 regional gas markets, multi GHG, national tax with marginal excess burden to account for double dividend hypothesis, no no regrets, terms of trade | ||||||
Holtsmark and Hagem (1998) | Costs in % of 1990 GDP per
country, EU targets are differentiated as agreed in June 1998 |
USA:+.29 Ca:+.46 EU:-.12 DK:+.53 Fin:-.12 Swe:+.08 Nor:+ 1.23 Rus:-.18 OthEIT:-.15 AuNZ:+.06 Jap-.08: N-AI:+.13 |
USA:+.27 Ca:+.42 EU:+.15 DK:+.23 Fin:-.11 Swe:+.02 Nor:+1.18 Rus:-.17 OthEIT:-.14 AuNZ:-.36 Jap:-.07 N-AI:+.11 |
USA:+.18 Ca:+.3 EU:-.11 DK:+.1 Fin:-.1 Swe:-.1 Nor:+1.23 Rus:-.33 OthEIT:+.33 AuNZ:-.12 Jap:-.07 N-AI:+.08 |
partial & static ACT, strategic OPEC, 3 regional gas markets, multi GHG, national tax with marginal excess burden to account for double dividend hypothesis, no no regrets, terms of trade | ||||||
Sands et al. (1998) | US Costs; non- Kyoto- Targets, 4 policy scenarios: e. g.: 1990 + 10% (M90+ 1) | M90:+.2 M90+.1:+.07 M90-.1:+.43 M95:+.07 |
M90:-.18 | M90:-.09 | SGM, IEA and Government- data, 7 regions, 9 prod sectors, input sectors, determines global C- tax, hot air | ||||||
Kainuma et al. (1998), (1999) | % GDP loss per region; Asia | USA:+.4 Jap:+.25 EU:+.3 EEFSU:+.2 Chi:+.2 Ind:-.25 Kor:-.55 MEA:+.15 |
USA:+.3 Jap:+.05 EU:+.4 EEFSU:- 2.2 Chi:+.15 Ind:-.15 Kor:-.35 MEA:+.8 |
USA:+.3 Jap:+.15 EU:+.3 EEFSU:-3.6 Chi:+.2 Ind:-.15 Kor:-.25 MEA:+.65 |
USA:+.3 Jap:+.1 EU:+.15 EEFSU:-2.7 Chi:+.4 Ind:-.15 Kor:-.35 MEA:+.633 |
USA:+.2 |
AIM, IEA, GTAP and IMF- data, 21 regions, 7 energy-, 4 non- energy goods, | ||||
Mensbrugghe (1998) | % GDP loss in bill. 1985 $ | +.7 | +.2 | +.1 | GREEN- A multi-sector, multi-region dynamic general equilibrium model for quantifiying the costs of curbing CO2 emissions: 12 regions, 4 activities, autonomous energy efficiency improvements (AEEI), backstops, terms of trades | ||||||
Richels et al. (1996) | 20% below 1990 emissions until 2010 and the stab. emissions at his level; Annex 1 countries; trill. 1990 US$, OECD, GDP loss | CETA | OECD:+ 2 NOECD:+.3 |
OECD:+1.3 NOECD:-.7 OECD: +2 NOECD:-.5 OECD:+1.1 NOECD: 0 OECD:+.5 NOECD:-.2 |
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EPPA | OECD: +5.2 NOECD:+1.1 |
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MERGE | OECD:+ 2 NOECD:+.3 |
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MiniCAM | OECD:+1.5 NOECD:-.1 |
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Nordhaus and Boyer (1999) | RICE- 98; GDP loss in 1990$ | US: 84 bil. Jap: 38 bil. EU: 65 bil. CANZ: 19 bil. |
US: 60 bil. Jp: 19 bil. EU: 36 bil. CANZ: 11 bil. |
US: 21 bil. Jap: 6 bil. EU: 15 bil. CANZ: 4 bil. |
RICE- 98; 13 regions, no trade in goods, IAM; | ||||||
Tol (1999a) | consumption loss 1990- 2100, discounted with 5% to 1990, in trill. $; target: Kyoto forever | No- AI: -.15 OECD: 2.75 EEfSU: .75 |
No-AI: -.2 OECD: 2.25 EEfSU: .6 |
lim. purch:34 No- AI:-.15 OECD: 2.45 EEfSU: .5 |
No- AI: -0.15 OECD: 2.1 EEfSU: .6 | No- AI: .5 OECD: 1.25 EEfSU: .4535 |
No- AI: .45 OECD: .9 EEfSU: .35 |
Framework for Uncertainty, Negotiation and Distribution (FUND)- IAM; 9 regions, dynamic damage | |||
lim. sale:36 No- AI: .8 OECD: 1.9 EEfSU: -.15 |
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lim. both: No- AI: .65 OECD:2.15 EEfSU: -.15 |
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Kurosawa et al. (1999) | GDP loss in bill. 1990 $ in 2010 | US: Jap: EU: 90 CANZ: |
US: Jap: 10 EU: 90 CANZ: |
US: Jap: EU: 63 CANZ: |
GRAPE- IAM, 10 regions | ||||||
Criqui et al. (1999) | Total Cost (GDP) in 1990 $ in 2010 | 56419 Mio. (0.11) | only for US and 16 583 Mio. Asian countries (0.03) | 5808 Mio. (0.01) | POLES | ||||||
Ellerman et al. (1998) | Total Cost in bill. 1985 US$ | +120 | +88 | +11 | Emissions Prediction and Policy Assessment (EPPA)- Model | ||||||
Zhang (1998) | Reductions in total abatement costs compared to the no- trade- | : | 37USA:
81 Jap: 91 EU: 2.3 OOECD: 33.5 OECD: 82.4 |
38USA:
63.7 Jap: 71.9 EU: 39.2 OOECD: 70.8 OECD: 66 |
USA: 85.2 Jap: 93.1 EU: 0.2 OOECD: 45.3 OECD: 86.5 |
12 regions, 6 GHG | |||||
39USA:
81.1 Jap: 77.4 EU: 19.1 OOECD: 68.8 OECD: 79.6 |
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Other reports in this collection |