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A Climate Treaty and the Norwegian Economy: A CGE Assessment

This paper examines the impact of an international climate treaty on 61 single country-Norway. A disaggregate computable general equilibrium (CGE), model is used. We discuss the treaty's effects on main macroeconomic indicators, economic growth, distributional impacts, the impact on pollutant emissions other than CO2 and the secondary benefits of this reduction. The results suggest that CO2 emissions will decrease compared to the current level, The distributional impacts are modest. Increases in secondary benefits recoup almost one half of the loss in private consumption. We characterize the uncertainty of this estimate.

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Energy Specializations: Energy Modeling – Other; Energy and the Environment – Policy and Regulation

JEL Codes:
C59 - Econometric Modeling: Other
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: Climate treaty, CGE, Norway, greenhouse gases

DOI: 10.5547/ISSN0195-6574-EJ-Vol15-No1-5

Published in Volume15, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.