Distributive Impacts from a Kyoto Policy

By Subal C. Kumbhakar, Chantal Guertin, Anantha K. Duraiappah on May 4, 2003
FROM THE INTRODUCTION: In this paper, we develop a welfare model based on consumer surplus and run a number of simulations looking at the welfare losses accruing from energy price increases caused by a shift to reduce carbon emissions by six per cent of 1990 levels. The price increases we use for this paper are derived from the MARKAL-EQUITY model (Guertin 2002). The energy demand function and the respective price elasticities used in this model are similar to the functions used in the MARKAL-EQUITY model.

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IISD, 2003