GTAP Resources: Resource Display
| GTAP Resource #4608 |
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"Role of Agriculture, Carbon Market Linking and Backstop Technologies on New Zealand’s Economy during the Second Commitment Period of the Kyoto Protocol" by Fernandez, Mario Abstract New Zealand (NZ) implemented the Emissions Trading Scheme (ETS) in 2008 as part of the country’s commitment to the Kyoto Protocol. The ETS has been modified several times and the main feature is the decision of not pricing emissions from agriculture (including livestock). As New Zealand must meet reduction targets, then the bulk of mitigation efforts may rely on the energy-intensive and energy production sectors. As a second commitment period may come into place between 2020 and 2030, then it is necessary to understand the implications of additional reduction targets over the New Zealand economy. We use the CliMAT-DGE model which is a multiregional and multi-sectoral dynamic general equilibrium model with a relatively long time horizon of approximately 100 years. CliMAT-DGE’s framework is based on the Massachusetts Institute of Technology’s (MIT’s) Emission Prediction and Policy Analysis (EPPA) Model, but with a strong focus on NZ. This model is suited to studying the efficient (re)allocation of resources within the economy and over time in response to resource or productivity shocks or policies. The key purpose of the model is to analyse the responses of the NZ economy when changes in domestic and foreign environmental policy and/or trade patterns occur. The model represents all transactions that take place within the economy, in a regional, national or worldwide context, for a particular year. Because the model has been calibrated for multiple years, it is suitable for dynamic analysis to incorporate long-term issues such as climate change and GHG emissions reduction policies. For the simulations we introduce the possibility that agriculture is not included in the ETS, the potential linking of the ETS with other carbon markets, and the availability of backstop technologies such as electricity generation with carbon capture and sequestration. Results show that under any scenario (policy), the costs for NZ economy, in terms of GDP losses, are larger when agric... |
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Last Modified: 9/15/2023 2:05:45 PM
