Economic Impacts of Multilateral Emission Reduction Policies

Using an applied general equilibrium model, we explore the impacts of uniform reduction targets, a uniform carbon tax, and permit trading in the Annex 1 countries for the period 2000-2020. Next, we assess the impacts of enlarging the A-1 coalition to the globe, and allow for global permit trading. The impacts suggest among others that more research is necessary on how to change the size of the coalition. This project is funded by the Dutch Ministry of Environment (VROM), the Netherlands Bureau for Economic Policy Analysis (CPB), and the National Institute of Public health and the Environment (RIVM). The authors thank Ben Geurts, Andre de Jong, Carl Koopmans, Paul Tang and Hans Timmer (CPB) and Rob Swart (RIVM) for their comments on the simulations, and Nico van Leeuwen (CPB) for providing the figures. The views and conclusions do not reflect general views of VROM, CPB, or RIVM. Responsibility for any errors made in this paper remain with the authors