Marginal Abatement Cost Curves in General Equilibrium: The Influence of World Energy Prices

Gernot Klepper and Sonja Peterson ()
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Gernot Klepper: Kiel Institute for World Economics

No 2004.136, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Marginal abatement cost curves (MACCs) are one of the favorite instruments to analyze the impacts of the implementation of the Kyoto Protocol and emissions trading. As shown in this paper one important factor that influences MACCs are energy prices. This leads to the question of how to define MACCs in a general equilibrium context where the overall abatement level world wide influences energy prices and thus national MACCs. We first discuss the mechanisms theoretically and then use the CGE model DART to quantify the effects. The result is, that changes in energy prices resulting from different world wide abatement levels do indeed affect the national MACCs. Also, we compare different possibilities of defining MACCs - of which some turn out to be robust against changes in energy prices while others vary considerably.

Keywords: Climate change; Marginal abatement cost; Energy price; Computable general equilibrium model (search for similar items in EconPapers)
JEL-codes: C68 D58 F18 Q41 (search for similar items in EconPapers)
Date: 2004-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Marginal abatement cost curves in general equilibrium: The influence of world energy prices (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2004.136

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