GTAP-E

1. GTAP-E From GTAP technical paper 16 Jean-Marc Burniaux and Truong Truong

2. Energy moved from intermediate input to value added tier. Shares a tier with capital. • The model has 8 regions and 8 commodities. • 8 regions: USA, EU, Eastern Europe and FSU, Japan, other annex 1 countries, net energy exporters, China and India, and Rest of the World. • Sectors are agriculture, coal, oil, gas, oil products, electricity, other energy intensive, and other industries and services.

3. 3 scenarios • 1 No emission trading • Total emission constraints applied to Annex 1 countries. Targeted reductions: US 36%, EU 22%, Japan 32%, Other annex 1 countries 36% • 2 Trade among Annex 1 countries only • Emissions trading permitted among annex 1 countries • 3 Worldwide emission trading

4. Closure no trade • exogenous • RCTAX • MARKCTAX • dcwfd(NEGYCOM3,PROD_COMM,REG) • . • . • dcwfi(NEGYCOM3,PROD_COMM,REG) • . • . • dcwpd(NEGYCOM3,REG) • dcwpi(NEGYCOM3,REG) • dcwgd(NEGYCOM3,REG) • dcwgi(NEGYCOM3,REG) • c_CTAXBAS(REG,NEGYCOM3B) • ! DTBAL exogenous for all regions except one, • ! and cgdslack exogenous for that one region (which can be any one). • dtbal("USA") • dtbal("EU") • dtbal("EEFSU") • dtbal("JPN") • dtbal("RoA1") • dtbal("EEx") • dtbal("CHIND") • cgdslack("RoW") ; • Rest Endogenous ; • swap gco2t("USA")=RCTAX("USA"); • swap gco2t("EU")=RCTAX("EU"); • swap gco2t("JPN")=RCTAX("JPN"); • swap gco2t("RoA1")=RCTAX("RoA1");

5. No trade scenario • Carbon taxes in $/ton that were required to achieve the desired reductions were $126 US, $147 EU, $230 Japan, $178 other annex 1 countries • The largest reduction in world output: US coal sector, the EU coal sector, Japanese gas sector • Net reductions in total output ocurred in all regions. • EEFSU, Oil exporters, China-India, and RoW increased production of oil products, electricity, and energy intensive industries • Total Changes in output of Annex 1 countries ranged from -126 in the US to + 4 EEFSU • Energy exporters’ output declined; • Other Annex 1 countries had only very small changes.

6. Trading among Annex 1 Countries • Trading among annex 1 countries targeted carbon emissions in individual countries • Emission reduction target 22% overall and same regional targets • Emissions EEFSU allowed to increase 13 percent • Results: carbon tax $78/ton all trading regions • Percent changes: USA -27, EU -14, EEFSU -27, JPN -15, RoA1 -21 EEx 2, CHIND -1, RoW 4 • Overall changes in output quantities to achieve reductions smaller than in no trading scenario • Overall reduction was largest in coal sector. US coal sector declines 38% • Energy exporters and China-India registered small increases in oil products, electricity and oil intensive industries, but reductions in total output (Oil exporters, China-India)

7. Worldwide emission trading • Trading worldwide targeted similar carbon emissions as the previous scenario • However, now overall emission reduction target 14% • Results: carbon tax $30/ton all trading regions • Percent changes: USA -13, EU -6, EEFSU -13, JPN -6, RoA1 -9, EEx -7, CHIND -32, RoW -9 • Overall changes in output quantities to achieve reductions smallest in this scenario • Largest overall % reduction now in Chinese coal sector (-38%). US coal sector declines 21% • Total output declined in each region.

8. Terms of trade effects

9. Utility changes

10. Worldwide CO2 Trade without US • In scenario 3 all of the world except the US trades (US has no quota) • Total emission target remains the same

11. Technology Change and US Participation in Kyoto Protocol • Trading in Annex 1 countries only with and without US participation • Coal-saving technological change in electricity production is introduced

12. Updating GDP and Population Growth Rates • In the first (no trade) scenario, updated GDP and population grow rates are incorporated into the model • Emission targets are changed to reflect the altered relative importance of countries