The Burden of Emissions Restrictions

Abstract

Models with time horizons of 100 years are customarily used to predict anthropogenic greenhouse gas emissions. Historical evidence indicates that over this time span the current consumption patterns in developing countries are likely to change and converge to the present patterns in developed countries. This study deals with modeling this type of convergence in consumption patterns within the MIT Emission Prediction and Policy Analysis Model (EPPA) framework. We find that the differences in the model with static consumption-function coefficients from that in the model with dynamic coefficients have significant implications for the costs of emissions restrictions in developing countries, even though the regional emissions profiles are virtually the same. Our results suggest that the costs of emissions restrictions in developing countries would be higher if the changes in consumption patterns are taken account of than if they are ignored in the simulation model.