Abstract
This paper argues that using simple extrapolations of aggregate gross domestic product (GDP) growth as a basis for projecting energy use and carbon emissions in the 1nedium term is potentially misleading. In fact, we argue that simple extrapolations derived by projecting GDP and assuming all variables grow in proportion would do a particularly poor job of explaining the
historical record (and there is no reason to expect this approach to do better in the future). In this paper we present medium-term projections for the world economy, starting with projections of future population growth and industry-level technical change based on a wide range of empirical studies. We use these projections in an empirically based multisector general equilibrium model of the world economy to calculate aggregate GDP and the sectoral composition of GDP endogenously. We then explore the sensitivity of the aggregate outcomes across economies to the assumptions about sectoral productivity growth. In particular, we use as a metric the emissions of carbon dioxide from fossil fuel use in the global economy. Under
each set of assumptions we calculate the size of a carbon tax sufficient to stabilize emissions in 2010 at 1990 levels. We show that this tax varies significantly depending on the assumptions made about productivity growth at the sectoral level.
historical record (and there is no reason to expect this approach to do better in the future). In this paper we present medium-term projections for the world economy, starting with projections of future population growth and industry-level technical change based on a wide range of empirical studies. We use these projections in an empirically based multisector general equilibrium model of the world economy to calculate aggregate GDP and the sectoral composition of GDP endogenously. We then explore the sensitivity of the aggregate outcomes across economies to the assumptions about sectoral productivity growth. In particular, we use as a metric the emissions of carbon dioxide from fossil fuel use in the global economy. Under
each set of assumptions we calculate the size of a carbon tax sufficient to stabilize emissions in 2010 at 1990 levels. We show that this tax varies significantly depending on the assumptions made about productivity growth at the sectoral level.
| Original language | English |
|---|---|
| Title of host publication | Climate Change: Integrating Economics, and Policy |
| Subtitle of host publication | IIASA Collaborative Paper |
| Editors | N. Nakicenovic, W. D. Nordhaus, R. Richels, F. L. Toth |
| Place of Publication | Austria |
| Publisher | International Institute for Applied Systems Analysis |
| Pages | 181-206 |
| Number of pages | 26 |
| Volume | CP-96-001 |
| Publication status | Published - Dec 1996 |
| Event | Climate Change: Integrating Science, Economics and Policy: 3rd Workshop of the International Institute for Applied System Analysis - IIASA, Laxenburg, Austria Duration: 19 Mar 1996 → 20 Mar 1996 https://pure.iiasa.ac.at/id/eprint/5025/ |
Workshop
| Workshop | Climate Change: Integrating Science, Economics and Policy |
|---|---|
| Abbreviated title | 3rd IIASA |
| Country/Territory | Austria |
| City | Laxenburg |
| Period | 19/03/96 → 20/03/96 |
| Other | The international workshop on "Climate Change: Integrating Science, Economics, and Policy" is the third in a series of interdisciplinary meetings organized at the International Institute for Applied Systems Analysis (IIASA) during the past four years. Currently, it is widely recognized in both the analytical and policy coinmunities that the complex issues surrounding the prospect of climate cha.nge and response measures and policies cannot be adequately assessed from the perspective of any single discipline in either the natural or social sciences, and that these issues cannot be resolved in the policy domain alone. This is one of the reasons for the continued research activities in this important area at IIASA and for the decision to organize this, the third international workshop to address these issues. The workshop originated because the organizers shared the view that small, focused meetings on specific a.spects of the economics of international enviroilmental problems would be a particularly effective way to expand the frontier of knowledge in this area. Such meetings would emphasize the interdisciplinary and international nature of both the issue and the underlying scientific effort. This vision has continued through all three of the workshops held to date. |
| Internet address |