Developing country effects of Kyoto-type emissions restrictions
Author(s)Babiker, Mustafa H.M.; Jacoby, Henry D.
Economic links among countries, through trade, will cause the effects of greenhouse-gas control measures taken by one set of nations to ripple through the international trade system, affecting countries that may not have agreed to share the burdens of control. So, for example, emission restrictions under the Kyoto Protocol will increase the cost to Annex B regions of using carbon-emitting fuels and raise the manufacturing cost of their energy-intensive goods, which may be exported in part to developing countries. The restrictions also will lower the global demand for these fuels and reduce their international prices. In addition, the emissions controls may depress the level of economic activity in countries under emissions restriction, lowering their demand for imports, some of which come from developing countries. In combination, these changes in trade volumes and prices can have complex consequences, harming some developing countries while benefiting others. This paper explores these consequences using a detailed Computable General Equilibrium (CGE) model of the world economy.
Includes bibliographical references (p. 26-28).Abstract in HTML and technical report in PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change website (http://mit.edu/globalchange/www/)
MIT Joint Program on the Science and Policy of Global Change
Report no. 53