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The Compensation Mechanism in the RAINS Model: The Norwegian Targets for Acidification

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Abstract

The RAINS model is used to calculate cost minimising abatement policies subject to European-wide spatial restrictions on pollution. The principle for choosing environmental targets for the 1994 Oslo Protocol was closing a gap between benchmark- and critical loads for each grid with a uniform percentage. During the negotiations for the 1999 Gothenburg Protocol accumulated ecosystems exceedances was adapted as basis for gap closure, and overshooting of the constraints allowed as an option, provided compensation could be found within the same country. A theoretical discussion of this compensation mechanism is provided. A simulation study, using the full RAINS model, of the impact of different levels of targets for troublesome Norwegian grids is presented, and results in the form of changes in accumulated acidity excesses and costs for the participating countries are reported.

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  • Førsund, Finn R & Wolfgang, Ove, 2001. "The Compensation Mechanism in the RAINS Model: The Norwegian Targets for Acidification," Memorandum 34/2001, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2001_034
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    1. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, September.
    2. Finn Førsund & Eric NÆvdal, 1998. "Efficiency Gains Under Exchange-Rate Emission Trading," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(4), pages 403-423, December.
    3. Gough, C. A. & Bailey, P. D. & Biewald, B. & Kuylenstierna, J. C. I. & Chadwick, M. J., 1994. "Environmentally targeted objectives for reducing acidification in Europe," Energy Policy, Elsevier, vol. 22(12), pages 1055-1066, December.
    4. F.R. Forsund, 2000. "An Economic Interpretation of the Compensation Mechanism in the RAINS Model," Working Papers ir00036, International Institute for Applied Systems Analysis.
    5. Wolfgang, Ove, 2001. "Eco-Correlation in Acidification Scenarios," Memorandum 23/2001, Oslo University, Department of Economics.
    6. Ger Klaassen & Finn Førsund & Markus Amann, 1994. "Emission trading in Europe with an exchange rate," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(4), pages 305-330, August.
    7. Ellis, J. Hugh, 1988. "Multiobjective mathematical programming models for acid rain control," European Journal of Operational Research, Elsevier, vol. 35(3), pages 365-377, June.
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    More about this item

    Keywords

    Acid rain; RAINS; critical loads; gap closure; accumulated exceedances; compensation mechanism;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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