A consistent mapping of all complex ramifications (including direct and indirect effects) of variousgreenhouse policies in an open institutional economy requires the use of a general equilibriumframework. From the existing set of available equilibrium models we have selected the so-calledGTAP-model. This paper presents the results of experiments with the extended GTAP-model,coined the GTAP-CDM. This experiment emphasises the costs of various Kyoto policy regimes,interpreted as packages of institutions and instruments serving to control for globalenvironmental change. As specific instruments, we have chosen to analyze the impact of one ofthe Kyoto Protocol instruments, viz. Clean Development Mechanism (CDM). As far as institutionsare concerned, we discuss various policy options, since the negotiations on these instruments willprovide various possibilities for the final form of climate policy regimes to become effective.
marginal abatement costs clean development mechanism kyot protocol climate