Growth and Welfare Losses from Carbon Emissions Restrictions: A General Equilibrium Analysis for Egypt

This paper assesses the economic effects of carbon emission restrictions in Egypt. Like other studies, it is an exemplification of some of the economic possibilities under various conditions. However, it extends the domain of possibilities and suggests some issues that have not been considered in other studies. It is demonstrated clearly that, while annual emissions constraints have only a modest effect on long-run economic growth rates, they have substantial effect on the achieved levels of GDP and welfare. These results do not change much, even with backstop and unconventional technologies or change in discounting. However, postponing the imposition of constraints does have a significant effect, as does changing the form of the constraints to one based on accumulated emissions.