The Costs of Reducing CO2 Emissions : A Technical Manual

This paper presents simulation results using the OECD Secretariat's GREEN model to quantify the economic costs of possible international agreements to curb CO2 emissions. These results supersede the initial GREEN results published in Working Paper no. 103 in June 1991. The first section of the paper summarises the analysis and draws some conclusions for policy. Section II of the paper reviews the so-called Business-as-Usual scenario and presents some sensitivity analysis around it. Section III considers international agreements under which emission curbs are only applied by the OECD countries or the EC and no actions are taken by the non-OECD regions. Particular attention is paid to the possibility that unilateral action by the OECD countries might give rise to so-called "carbon leakages", i.e. higher emissions in the non-OECD regions. Section IV extends the coverage of the international agreements to embrace the non-OECD countries. It quantifies the gains from cost-effective ...