Stabilising the global greenhouse: A simulation model

Peter Michaelis

No 604, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper investigates the economic implications of a comprehensive approach to greenhouse policies that strives to stabilise the atmospheric concentration of greenhouse gases at an ecologicaliy determined threshold level. In a theoretical optimisation model conditions for an efficient allocation of abatement effort among pollutants and over time are derived. The model is empirically speeified and adapted to a dynamic GAMS-algorithm. By various Simulation runs for the period of 1990 to 2110, the economics of greenhouse gas aecumulation are explored. In particular, the long-run cost associated with the above stabilisation target are evaluated for three different policy scenarios: i) a comprehensive approach that covers all major greenhouse gases simultaneously, ii) a piecemeal approach that is limited to reducing CO2 emissions, and iii) a tenyear moratorium that postpones abatcment effort until new scientific cvidence on the greenhouse effect will become available. Comparing the Simulation results suggests that a piecemeal approach would considerably increase total cost, whercas a ten-year moratorium might be reasonable even if the probability of 'good news' is comparatively small.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:604

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