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Environmental Economics and Policy Studies

, Volume 16, Issue 4, pp 381–395 | Cite as

Estimating the impact of emission reduction target-setting on the macroeconomy

  • Akira MaedaEmail author
Research Article Progress in Sustainable Development Economics

Abstract

In recent times, greenhouse gas (GHG) reduction targets have been frequently discussed in climate-change policy debates. Computable energy-economic models have played a significant role in the process of formulating policy goals. However, these models are very complicated and contain many ad hoc parameters that may be unclear to policy makers. The purpose of this article is to explore how the elasticity parameters between carbon-based inputs and other inputs play significant roles in estimating the impacts of GHG reduction targets on both the GDP and carbon prices required for achieving the target. Further, it discusses the implications of using ad hoc parameters for climate-change policy making. The analysis is expected to contribute to creating a sound procedure for climate-change policy making.

Keywords

Climate-change policy Greenhouse gas reduction Computable general equilibrium analysis Elasticity of substitution 

JEL Classification

C68 Q43 Q58 

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Copyright information

© Springer Japan 2013

Authors and Affiliations

  1. 1.Graduate School of Arts and SciencesThe University of TokyoTokyoJapan

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