The project aims at providing advice to European policy makers about the best strategy for climate change mitigation, within the framework of the Kyoto protocol and the provided flexibility instruments, focusing on the interrelationships with global trade agreements. Based on rigorous quantitative analysis with a General Equilibrium Model of the world economy, the study will investigate how trade agreements interfere with climate change mitigation policies. Interaction between various trade regimes and climate change policies will by quantified in terms of efficiency implications as well as distributional consequences at the regional and sectoral level. With respect to the use of the Kyoto flexible instruments the project will identify the optimal mix between domestic emission limitation actions in the OECD countries and foreign abatement action considering transaction costs and risk premia associated with capital transfers outside the OECD.
Within the project it was analysed, how current and future trade treaties may interfere with climate change policies, hereby reinforcing or weakening the pattern of economic costs and benefits from emission abatement strategies across regions. Modelling exercises were performed to provide consistent quantitative results. Achievements were threefold:
1. Analysis of trade policies and trade liberalisation
2. Analysis of climate change policies
3. Implementation into the model.
These three fields were brought together successfully.
Funding SchemeCSC - Cost-sharing contracts
WC2H 7JJ London
EN3 4SF Enfield
3062 PA Rotterdam