THE MACROECONOMIC MODEL CONSEQUENCES OF CONTROLLING CARBON DIOXIDE EMISSIONS

Abstract

It was studied the Macroeconomic Model Consequences Of Controlling Carbon Dioxide Emissions. The aims of this study is to modify a model by combining "top-down macroeconomic model" with "bottom-up model" to stabilize CO2 emissions in the atmosphere with apply energy-efficiency technology and carbon tax to minimize CO2 production. The parameters measured are carbon energy demand, carbon energy intensity, carbon tax and carbon emissions. The results showed that the energy-efficiency technology is a sufficient method to reduce carbon emissions, namely energy-related CO2 emissions grew at 5.8% per year over 1976-90 and, in future, it will from grow at 5.2% and 3.1% per year for the high and low base cases respectively. The simulations in the econometric model have shown that carbon taxes by themselves are a sufficient method for reducing carbon emissions, where in case C, the carbon emissions are the smallest at 3.7% and 1.4% for the high and low cases, because all the carbon tax revenues are invested in carbon-abating technologies

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