Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy

Roberto Roson (), Francesco Bosello and Enrica De Cian ()
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Roberto Roson: Department of Economics, University Of Venice Cà Foscari

No 2007_09, Working Papers from University of Venice "Ca' Foscari", Department of Economics

Abstract: Future energy demand will be affected by changes in prices and income, but also by other factors, like temperature levels. This paper draws upon an econometric study, disentangling the contribution of temperature in the determination of the annual regional demand for energy goods. Combining estimates of temperature elasticities with scenarios of future climate change, it is possible to assess variations in energy demand induced (directly) by the global warming. We use this information to simulate a change in the demand structure of households in a CGE model of the world economy, in a set of assessment exercises. The changing demand structure triggers a structural adjustment process, influencing trade flows, regional competitiveness of industries and regions, and welfare. We also consider the possible existence of imperfect competition in the energy markets, analyzing the impact of changes in energy demand with an alternative model version, in which energy industries are modeled as Cournot oligopolies.

Keywords: Climate Change; Damage Function; Integrated Assessment; General Equilibrium. (search for similar items in EconPapers)
JEL-codes: C68 D58 F18 Q51 Q54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env and nep-mic
Date: 2007

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Related works:
Working Paper: Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:ven:wpaper:2007_09

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