Carbon Emissions Trading and Equity in International Agreements

This paper explores the distributional consequences of alternative emissions trading schemes. It is argued that the distributional impact stems from the difference between two social welfare functions: the function which is implicitly maximised in a competitive market equilibrium and the function which is implicitly adopted when a given equity principle is chosen. An integrated assessment model is used to illustrate these findings, by simulating the introduction of various emissions trading schemes for the Kyoto protocol on the reduction of greenhouse emissions. It is shown that (1) changes produced on an equity index by the imposition of emission constraints (by country) may not be significantly higher than those obtained by the subsequent introduction of a market mechanism, and that (2) the various market regimes which could be adopted have quite different distributional implications. This revised version was published online in July 2006 with corrections to the Cover Date.     

Accounting for adaptation and its effectiveness in International Environmental Agreements

Environmental Economics and Policy Studies - This paper analyses, within a standard International Environmental Agreement game, the effect of the introduction of adaptation on climate negotiation....     

KLUM@GTAP: Introducing Biophysical Aspects of Land-Use Decisions into a Computable General Equilibrium Model a Coupling Experiment

In this paper, the global agricultural land use model Kleines Land Use Model is coupled to an extended version of the computable general equilibrium model (CGE) Global Trade Analysis Project in order to consistently assess the integrated impacts of climate change on global cropland allocation and its implication for economic development. The methodology is innovative as it introduces dynamic economic land-use decisions based also on the biophysical aspects of land into a state-of-the-art CGE; it further allows the projection of resulting changes in cropland patterns on a spatially more explicit level. A convergence test and illustrative future simulations underpin the robustness and potentials of the coupled system. Reference simulations with the uncoupled models emphasise the impact and relevance of the coupling; the results of coupled and uncoupled simulations can differ by several hundred percent.

Economy-wide impacts of climate change: a joint analysis for sea level rise and tourism

While climate change impacts on human life have well defined and different origins, the interactions among the diverse impacts are not yet fully understood. Their final effects, however, especially those involving social-economic responses, are likely to play an important role. This paper is one of the first attempts to disentangle and highlight the role of these interactions. It focuses on the economic assessment of two specific climate change impacts: sea-level rise and changes in tourism flows. By using a Computable General Equilibrium (CGE) model the two impacts categories are first analysed separately and then jointly. Considered separately, in 2050, the forecasted 25 cm. of sea level rise imply a GDP loss ranging from (−) 0.1% in South East Asia to almost no loss in Canada, while redistribution of tourism flows – which in terms of arrivals favours Western Europe, Japan, Korea and Canada and penalises all the other world regions – triggers GDP losses ranging from (−) 0.5% in Small Island States to (−) 0.0004% in Canada. GDP gainers are Australia, New Zealand, Western Europe, Middle East and South Asia. The impact of sea level rise and tourism were simulated jointly and the results compared with those of the two disjoint simulations. From a qualitative point of view, the joint effects are similar to the outcomes of the disjoint exercises; from a quantitative perspective, however, impact interaction does play a significant role. In six cases out of 16 there is a detectable (higher than 2% and peaking to 70%) difference between the sum of the outcomes in the disjoint simulation and the outcomes of the joint simulations. Moreover, the relative contribution of each single impact category has been disentangled from the final result. In the case under scrutiny, demand shocks induced by changes in tourism flows outweigh the supply-side shock induced by the loss of coastal land.