IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v15y1994i1p57-76.html
   My bibliography  Save this article

International Trade in Oil, Gas and Carbon Emission Rights: An Intertemporal General Equilibrium Model

Author

Listed:
  • Alan S. Manne
  • Thomas F. Rutherford

Abstract

This paper employs a five-region intertemporal model to examine three issues related to carbon emission restrictions. First, we investigate the possible impact of such limits upon future oil prices. We show that carbon limits are likely to differ in their near- and long-term impact. Second, we analyze the problem of “leakage†which could arise if the OECD countries were to adopt unilateral limits upon carbon emissions. Third, we quantify some of the gains from trade in carbon emission rights. Each of these issues have been studied before, but to our knowledge this is the first study based on a multi-regional, forward-looking model. We show that sequential joint maximization can be an effective way to compute equilibria for intertemporal general equilibrium models of international trade.

Suggested Citation

  • Alan S. Manne & Thomas F. Rutherford, 1994. "International Trade in Oil, Gas and Carbon Emission Rights: An Intertemporal General Equilibrium Model," The Energy Journal, , vol. 15(1), pages 57-76, January.
    • Handle: RePEc:sae:enejou:v:15:y:1994:i:1:p:57-76
    DOI: 10.5547/ISSN0195-6574-EJ-Vol15-No1-4
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/ISSN0195-6574-EJ-Vol15-No1-4
    Download Restriction: no
    File URL: https://libkey.io/10.5547/ISSN0195-6574-EJ-Vol15-No1-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Victor Ginsburgh & Jean Waelbroeck, 1981. "Activity Analysis and General Equilibrium Modelling," ULB Institutional Repository 2013/1649, ULB -- Universite Libre de Bruxelles.
    2. John Pezzey, 1992. "Analysis of Unilateral CO2 Control in the European Community and OECD," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 159-172.
    3. Alan Manne & Richard Richels, 1992. "Buying Greenhouse Insurance: The Economic Costs of CO2 Emission Limits," MIT Press Books, The MIT Press, edition 1, volume 1, number 026213280x, December.
    4. repec:bla:scandj:v:95:y:1993:i:3:p:257-78 is not listed on IDEAS
    5. John Pezzey, 1992. "Analysis of Unilateral CO, Control in the European Community and OECD," The Energy Journal, , vol. 13(3), pages 159-171, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Berg, Elin & Kverndokk, Snorre & Rosendahl, Knut Einar, 1998. "Gains from cartelisation in the oil market," Energy Policy, Elsevier, vol. 26(9), pages 725-727, August.
    2. Stephen P. A. Brown & Hillard G. Huntington, 1998. "Some implications of increased cooperation in world oil conservation," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 2-9.
    3. Pang, Rui-zhi & Deng, Zhong-qi & Chiu, Yung-ho, 2015. "Pareto improvement through a reallocation of carbon emission quotas," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 419-430.
    4. Liu, Xuemei, 2008. "The monetary compensation mechanism: An alternative to the clean development mechanism," Ecological Economics, Elsevier, vol. 66(2-3), pages 289-297, June.
    5. Hodjat Ghadhimi, 2009. "Sustainable Economic Development in Energy Rich Economies: A Regional Approach," Working Papers Working Paper 2009-05, Regional Research Institute, West Virginia University, revised 21 Feb 2010.
    6. Hodjat Ghadimi, 2008. "Energy in a Resource-based Regional Economy: A Dynamic General Equilibrium Analysis," Working Papers Working Paper 2008-02, Regional Research Institute, West Virginia University.
    7. Berg, Elin & Kverndokk, Snorre & Rosendahl, Knut Einar, 2002. "Oil Exploration under Climate Treaties," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 493-516, November.
    8. Daniel J.A. Johansson & Christian Azar & Kristian Lindgren & Tobias A. Persson, 2009. "OPEC Strategies and Oil Rent in a Climate Conscious World," The Energy Journal, , vol. 30(3), pages 23-50, July.
    9. Jaccard, Mark & Montgomery, W David, 1996. "Costs of reducing greenhouse gas emissions in the USA and Canada," Energy Policy, Elsevier, vol. 24(10-11), pages 889-898.
    10. Boyd, Roy & Ibarraran, Maria E., 2002. "Costs of compliance with the Kyoto Protocol: a developing country perspective," Energy Economics, Elsevier, vol. 24(1), pages 21-39, January.
    11. repec:rri:wpaper:200802 is not listed on IDEAS
    12. Lars Lindholt, 1999. "Beyond Kyoto: CO2 permit prices and the markets for fossil fuels," Discussion Papers 258, Statistics Norway, Research Department.
    13. Stephen P. A. Brown, 1998. "Global warming policy: some economic implications," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q IV, pages 26-35.
    14. repec:rri:wpaper:200905 is not listed on IDEAS
    15. Kram, Tom & Hill, Douglas, 1996. "A multinational model for CO2 reduction : Defining boundaries of future CO2 emissions in nine countries," Energy Policy, Elsevier, vol. 24(1), pages 39-51, January.
    16. Springer, Urs, 2003. "International diversification of investments in climate change mitigation," Ecological Economics, Elsevier, vol. 46(1), pages 181-193, August.
    17. Fang, Guochang & Lu, Longxi & Tian, Lixin & he, Yu & Yin, Huibo, 2020. "Research on the influence mechanism of carbon trading on new energy—A case study of ESER system for China," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 545(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schmidt, Holger, 1995. "Verteilungseffekte im Klimaschutz-Prozeß," Discussion Papers in Development Economics 18, Justus Liebig University Giessen, Institute for Development Economics.
    2. N. Satyanarayana Murthy & Manoj Panda & Kirit Parikh, 2006. "CO2 Emissions Reduction Strategies and Economic Development of India," Development Economics Working Papers 22341, East Asian Bureau of Economic Research.
    3. Rolf Golombek & Jan Braten, 1994. "Incomplete International Climate Agreements: Optimal Carbon Taxes, Market Failures and Welfare Effects," The Energy Journal, , vol. 15(4), pages 141-165, October.
    4. N. Satyanarayana Murthy & Manoj K. Panda & Kirit S. Parikh, 2006. "CO2 Emissions reduction strategies and economic development of India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2006-004, Indira Gandhi Institute of Development Research, Mumbai, India.
    5. Leimbach, Marian & Edenhofer, Ottmar, 2007. "Technological spillovers within multi-region models: Intertemporal optimization beyond the Negishi approach," Economic Modelling, Elsevier, vol. 24(2), pages 272-294, March.
    6. N. Satyanarayana Murthy & Manoj Panda & Kirit Parikh, 2007. "CO2 Emission Reduction Strategies and Economic Development of India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 1(1), pages 85-118, March.
    7. Bergman, Lars, 2005. "CGE Modeling of Environmental Policy and Resource Management," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 24, pages 1273-1306, Elsevier.
    8. Marc Vielle & Alain L. Bernard, 1998. "Un exemple d'utilisation : le coût de politiques de réduction des gaz à effet de serre," Économie et Prévision, Programme National Persée, vol. 136(5), pages 33-48.
    9. Baker, Erin, 2005. "Uncertainty and learning in a strategic environment: global climate change," Resource and Energy Economics, Elsevier, vol. 27(1), pages 19-40, January.
    10. Rosendahl, Knut Einar, 2004. "Cost-effective environmental policy: implications of induced technological change," Journal of Environmental Economics and Management, Elsevier, vol. 48(3), pages 1099-1121, November.
    11. Rose, Steven K., 2014. "Integrated assessment modeling of climate change adaptation in forestry and pasture land use: A review," Energy Economics, Elsevier, vol. 46(C), pages 548-554.
    12. Julien Lefevre, 2018. "Modeling the Socioeconomic Impacts of the Adoption of a Carbon Pricing Instrument – Literature review," CIRED Working Papers hal-03128619, HAL.
    13. Roberto Roson & Francesco Bosello, 2007. "Estimating a Climate Change Damage Function through General Equilibrium Modeling," Working Papers 2007_08, Department of Economics, University of Venice "Ca' Foscari".
    14. Toth, Ferenc L, 1995. "Discounting in integrated assessments of climate change," Energy Policy, Elsevier, vol. 23(4-5), pages 403-409.
    15. repec:dgr:uvatin:20020095 is not listed on IDEAS
    16. Fankhauser, Samuel & Kverndokk, Snorre, 1996. "The global warming game -- Simulations of a CO2-reduction agreement," Resource and Energy Economics, Elsevier, vol. 18(1), pages 83-102, March.
    17. Aguiar, Angel & Corong, Erwin & van der Mensbrugghe, Dominique, 2020. "The GTAP Recursive Dynamic (GTAP-RD) Model: Version 1.0," Conference papers 333133, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Stephen P.A. Brown & Hillard G. Huntington, 1994. "LDC Cooperation in World Oil Conservation," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 310-328.
    19. Wene, C.-O., 1996. "Energy-economy analysis: Linking the macroeconomic and systems engineering approaches," Energy, Elsevier, vol. 21(9), pages 809-824.
    20. Erwin Corong & Thomas Hertel & Robert McDougall & Marinos Tsigas & Dominique van der Mensbrugghe, 2017. "The Standard GTAP Model, version 7," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 2(1), pages 1-119, June.
    21. Carlo Carraro, Emanuele Massetti, Lea Nicita, 2009. "How Does Climate Policy Affect Technical Change? An Analysis of the Direction and Pace of Technical Progress in a Climate-Economy Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).

    More about this item

    Keywords

    Oil; natural gas; trade; carbon emission rights; CGE model;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:enejou:v:15:y:1994:i:1:p:57-76. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.