On the robustness of marginal abatement cost curves: the influence of world energy prices

Gernot Klepper and Sonja Peterson ()

No 1138, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Since the study of Ellerman and Decaux (1998) marginal abatement cost curves (MACCs) have become one of the favorite instruments to analyze the impacts of the implementation of the Kyoto Protocol and emission trading. This paper shows that the MACC in one country depends - via the link of world energy prices - on the level of abate-ment in the rest of the world. The strength of the dependence is influenced by factors, such as trade elasticities and trade structures. After discussing the mechanism theoretically, the CGE model DART is used to quantify the effects. We show that the MACC of a region does indeed shift with changes in the abatement level in the rest of the world and that especially with low domestic abatement level the MACCs can differ considerably.

Keywords: energy prices; computable general equilibrium model; DART; marginal abatement costs (search for similar items in EconPapers)
JEL-codes: C68 D58 F18 Q41 (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1138

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