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Developing Countries' Greenhouse Emmissions: Uncertainty and Implications for Participation in the Kyoto Protocol

Abstract:
Developing countries can participate in the Kyoto Protocol to limit greenhouse gas emissions by adopting national emissions limits. Such limits could offer economic gains to developing countries, cost savings to industrialized countries, and environmental benefits. They could also address concerns of the U. S. Senate. On the other hand, uncertainty about greenhouse gas emissions in developing countries is so great that emissions limits may impose substantial costs if they turn out to be unexpectedly stringent. To manage risks arising from emissions limits, developing countries should index any emissions limits to variables that predict emissions in the absence of limits. This paper presents such an index-similar to one recently adopted by Argentina-and develops estimates showing that it could lower the risk of economic losses to developing countries from about 40 percent to about 35 percent.

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Energy Specializations: Energy and the Environment – Climate Change and Greenhouse Gases; Energy and the Environment – R&D and Emerging Technologies; Energy and the Environment – Policy and Regulation

JEL Codes:
Q54 - Climate; Natural Disasters and Their Management; Global Warming
O32 - Management of Technological Innovation and R&D
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: industrial policy, greenhouse gas mitigation, Kyoto Protocol, International cooperation, developing countries, climate change

DOI: 10.5547/ISSN0195-6574-EJ-Vol21-No4-4


Published in Volume21, Number 4 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.