PPP VERSUS MER: SEARCHING FOR ANSWERS IN A MULTI-DIMENSIONAL DEBATE.

The article focuses on the effect of exchange rates on emission scenarios. These scenarios are aimed to predict the trends of future greenhouse gas emissions and their driving forces. Six different integrated assessment models have been used for the development of emission scenarios. The economic growth is reported in U.S. dollars using market-exchange rates (MER) in most of the scenarios. MER-based economic projections has been criticized by various researchers. They argue that the actual welfare in different regions can be compared properly only by using purchasing power parities.