Buying Greenhouse Insurance: The Economic Costs of CO2 Emission Limits

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Overview

In recent years a growing concern that the increasing accumulation of greenhouse gases will lead to undesirable changes in global climate has resulted in a number of proposals, both in the United States and internationally, to set physical targets for reducing greenhouse gas emissions. But what will these proposals cost? Based on the authors' earlier ground-breaking work,
Buying Greenhouse Insurance outlines a way to think about greenhouse-effect decisions under uncertainty. It describes an insightful model for determining the economic costs of limiting carbon dioxide emissions produced by burning fossil fuels and provides a solid analytical base for rethinking public policy on the farreaching issue of global warming.Manne and Richels present region-by-region estimates of the costs that would underlie an international agreement. Using a computer model known as Global 2100, they analyze the economic impacts of limiting C02 emissions under alternative supply and conservation scenarios. The results clearly indicate that a reduction in emissions is not the sole policy response to potential climate change.Following a summary of the greenhouse effect, its likely causes, and possible consequences, Manne and Richels take up issues that concern the public at large. They provide an overview of Global 2100, look at how the U.S.
energy sector is likely to evolve under businessas-usual conditions and under carbon constraints,
and describe the concept of "greenhouse insurance." They consider possible global agreements,
including an estimate of benefits that might result from trading in an international market in emission rights. They conclude with a technical description directed toward modeling specialists.Alan Manne is Professor of Operations Research at Stanford University. Richard Richels is Director of the Energy Analysis and Planning Department at the Electric Power Research
Institute.

The MIT Press

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Product Details

  • ISBN-13: 9780262132800
  • Publisher: MIT Press
  • Publication date: 5/27/1992
  • Edition description: New Edition
  • Pages: 194
  • Product dimensions: 6.20 (w) x 9.10 (h) x 0.80 (d)

Table of Contents

Preface
1 Overview 1
Pt. I Policy Perspectives
2 Global 2100: A Model of CO2-Energy-Economy Interactions 25
3 The Costs of Limiting U.S. CO2 Emissions 45
4 Decision Making under Uncertainty 67
5 A Global Cost Analysis 89
6 Willingness to Pay for Carbon Emission Rights 111
Pt. II Model Structure
7 Global 2100: Model Formulation 119
8 A Decomposition Procedure for International Trade in Carbon Emission Rights 141
9 Estimating The Energy Conservation Parameters: An Experiment in Backcasting 151
Appendix A Macro Assumptions (MACRO.TAB) 163
Appendix B Electric Power Technologies (ELEC.TAB) 165
Appendix C Nonelectric Energy Supplies (NELE.TAB) 169
Appendix D International Oil Trade (OILTRADE.TAB) 173
Appendix E Carbon Emissions (CARBON.TAB) 175
Index 179
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