Please use this identifier to cite or link to this item:
Böhringer, Christoph
Welsch, Heinz
Year of Publication: 
Series/Report no.: 
ZEW Discussion Papers 99-13
In the context of climate protection policy it has been suggested that global CO2 emissions should be reduced significantly (contraction) and that per capita emissions should gradually be equalized across countries (convergence). This paper uses a dynamic multi-region computable general equilibrium model of the world economy to assess the economics of ?Contraction and Convergence? (C&C). In comparing a regime of tradable and non-tradable emission rights for implementing C&C we find that the former allows to reduce long-term costs of abatement in terms of Hicksian equivalent variation in lifetime income by more than 50% percent in comparison with the latter. Under a tradable permit regime some developing countries improve their economic welfare even beyond non-abatement baseline levels. A decomposition of the general equilibrium effects associated with C&C shows that changes in the terms of trade constitute a key determinant of the overall welfare effects.
climate protection
international equity
emissions trading
economic welfare
computable general equilibrium modeling
Document Type: 
Working Paper

Files in This Item:
117.46 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.