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Assessing Energy Use and Emissions Cuts in OECD and Non-OECD Countries: 1980-2030

This note examines the simulation of emissions cuts using the GTAP-Energy framework to understand global energy use trends from 1980 to 2030. It highlights the phenomenal growth in Asian economies, particularly China and India, prompting a reconsideration of the impact of emissions reduction commitments under the Kyoto Protocol. The study incorporates updated production and population data to assess the necessary CO2 cuts and the welfare implications of these actions. It also discusses the varying impacts of emissions trading, tax rates, and terms of trade on industrialized nations versus energy exporters.

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Assessing Energy Use and Emissions Cuts in OECD and Non-OECD Countries: 1980-2030

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  1. GTAP-Energy: A note Christine Lasco and Andy Mold

  2. World Marketed Energy Use: OECD and Non-OECD, 1980-2030 Source: IEO, 2006

  3. Possible problems with Burniaux and Troung (2002)…. • Paper uses 1997 GTAP to simulate impact of emissions cuts • Burniau and Troung use 1994 growth projections • Subsequently, parts of the world economy has experienced phenomenal growth, especially in Asia (China, India) • Thus need to update experiment?

  4. Growth Rates Predicted….

  5. Alternative Scenario…. • Model incorporates shock to basic E-GTAP model, augmenting factors of production and population on a regional basis using more recent data. • Base data subsequently used to re-rerun the basic Burniaux and Troung (2002), having recalculated the necessary cuts in CO2 required to meet the Kyoto commitments.

  6. Welfare Decomposition of implementing Kyoto no trading Source: Burniau and Troung, 2002 and own elaboration

  7. Welfare decomposition…

  8. Explanations?... • Growth of China/India means a greater effort needs to be made by industrialised countries in order to attain the Kyoto objectives • Higher tax rates on fuel in RoA1 countries means that cost of achieving objectives is correspondingly higher • Terms of trade impact positive for EU and US, but sharply negative for energy exporters.

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