nep-res New Economics Papers
on Resource Economics
Issue of 2005‒03‒13
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Cost-Effective Policies to Reduce Vehicle Emissions By Don Fullerton; Li Gan
  2. Global Climate Policy in a Post-Kyoto World By Georg Muller-Furstenberger; Gunter Stephan
  3. "Hot Air" and Market Power in International Emission Trading By Florent Pratlong; Denise Van Regemorter; Paul Zagamé

  1. By: Don Fullerton; Li Gan
    Abstract: This paper uses an estimated demand system that accounts for heterogeneity to calculate and compare the lost consumer surplus from a higher tax on gasoline, a tax on distance, or a subsidy for buying a newer car. We introduce a view of cost-effectiveness that compares policies instead of technologies. Each tax might induce some consumers to drive less, some to switch from two vehicles to one, and some to buy a car instead of an SUV. Our model captures these behaviors. For each rate of tax, we simulate the changes in all such choices and how the new choices affect emissions. We also calculate the equivalent variation and subtract tax revenue to get deadweight loss. Finally, we take the added deadweight loss over the additional abatement as the social marginal cost of abatement, and we plot this curve for several different tax policies.
    JEL: H2 Q5
    Date: 2005–03
  2. By: Georg Muller-Furstenberger; Gunter Stephan
    Abstract: Obviously, there are different views on how successful the Kyoto process was in establishing interna-tional cooperation in greenhouse gas abatement. But independent of that, the question is urgent: What might happen after 2012? Will there be a new initiative for an internationally coordinated climate policy or does the world fall back into a regime of non-cooperative abatement policies? This paper analyses costs and benefits of three different post-Kyoto policy options: On the one hand there is PARETO which is the nickname for the pareto-efficient internationalization of the external effects of global cli-mate change through international trade in carbon rights on the one hand. And there is CAP as well as INTAG on the other. Both are unilateral climate policies. CAP denotes a scenario where regions aim for reducing domestic carbon emissions by a certain percentage annually. INTAG is a short cut for intensity targeting which is the US’ most preferred climate policy option. It refers to the same abate-ment policy, however by means of technological progress only
    Keywords: Climate policy; intensity targeting; R&D investments; Integrated Assessment
    JEL: O33 Q38 Q43
    Date: 2005–02
  3. By: Florent Pratlong (ERASME et EUREQua); Denise Van Regemorter (CES - Katholieke Universiteit Leuven); Paul Zagamé (ERASME et EUREQua)
    Abstract: In respect to GHG emission reduction targets set in the Kyoto Protocol in 1997, a emission quotas trading system will be implemented among the Annex-1 participating countries to lower the mitigation costs of the international cooperation on climate change issue. Nonetheless, in the way the market was designed, the States of the Former Soviet Union and Eastern Europe are likely to become large sellers of carbon as a result of the drop in emissions level due to economic downturn, referring to "Hot Air". Indeed, these countries may exert substantially a dominant position in the international permits market since the US had decided to withdraw from the Kyoto Protocol. This paper aims to develop a better understanding of the consequence of "Hot Air" in the international carbon emission trading, using some policy variants simulated with the computable general equilibrium GEM-E3 World model. The present analyse focuses particularly on the measures of "Hot Air" and the implications of potential market power in the emission trading market. Under various scenario options, the exercise of market power lead to a misallocation of abatement effort accross the remaining Annex-1 countries as a consequence of permits price and welfare effets.
    Keywords: Emission trading; market power; MECG
    JEL: D43 D58 Q48
    Date: 2004–07

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