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Do intensity targets control uncertainty better than quotas ? Conditions, calibrations, and caveats
- Source :
- Do Intensity Targets Control Uncertainty Better Than Quotas ? Conditions, Calibrations, And Caveats
- Publication Year :
- 2006
- Publisher :
- HAL CCSD, 2006.
-
Abstract
- Policy Research Working Paper ; 4033 Présenté au 3. World Congress of Environmental and Resource Economists ; 2006/07/03-07 ; Kyoto (JPN); Among policy instruments to control future greenhouse gases emissions, well-calibrated general intensity targets are known to lead to lower uncertainty on the amount of abatement than emissions quotas (Jotzo and Pezzey, 2004). This paper tests whether this result holds in a broader framework, and whether it applies to other policy-relevant variables as well. To do so, we provide a general representation of the uncertainty on future GDP, future business-as-usual emissions and future abatement costs, and derive the variances of four variables, namely (effective) emissions, abatement effort, marginal abatement costs and total abatement costs over GDP under a quota, a linear (LIT) and a general intensity target (GIT)—where for the latter the emissions ceiling is a power-law function of GDP. We confirm that GITs can always yield a lower variance than a quota for marginal costs, but find that this is not true for total costs over GDP. Using economic and emissions scenarios and forecast errors of past projections, we estimate ranges of values for our model parameters. We find that quotas dominate LITs over most of this range, that calibrating GITs over this wide range is difficult, and that GITs would yield only modest reductions in uncertainty relative to quotas.
- Subjects :
- Marginal cost
Total cost
QUOTA
020209 energy
[SDV]Life Sciences [q-bio]
05 social sciences
CLIMATE CHANGE
Environmental engineering
UNCERTAINTY
02 engineering and technology
INTENSITY TARGET
7. Clean energy
13. Climate action
Greenhouse gas
0502 economics and business
POST-KYOTO
0202 electrical engineering, electronic engineering, information engineering
Economics
Econometrics
Kyoto Protocol
050202 agricultural economics & policy
Emissions trading
Marginal utility
Marginal abatement cost
World Energy Outlook
Subjects
Details
- Language :
- English
- Database :
- OpenAIRE
- Journal :
- Do Intensity Targets Control Uncertainty Better Than Quotas ? Conditions, Calibrations, And Caveats
- Accession number :
- edsair.doi.dedup.....a2e4e6173b0cddf3f17c6cddf7659d90