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GTAP Resource #1465

"Japanese strategy on climate change to achieve the Kyoto Target with steady economic development -An investigation by using the dynamic version of GTAP-E model"
by Hamasaki, Hiroshi


Abstract
This research aims to analyse economic effect and environmental effectiveness of the Kyoto Protocol by using a specially-built dynamic version of GTAP-E. Several scenarios are modelled in this research. In Japan, gnewh more practical political measures on climate change is very hot issue. Ministry of the Environment would like to introduce climate change levy in 2005. Ministry of Economy, Trade and Industry aims to introduce gdown-streamh emission trading. Some economists propose Japanese government increase income tax and use the tax revenue to buy credits from Russia. This research gives some quantitative analysis on each proposed Japanese climate change policy.
For this research, I use gdynamich version of GTAP-E, which was made jointly with Dr. Mark Horridge, Monash University. We added new variables and equations that furnish gstatich GTAP-E with simple dynamic behaviour. These allow us to run linked annual GTAP-E simulations for each year between 1997 and 2023. For each region, the new equations are 1) linked net investment in each year to change in the capital stock for that year, 2) allowed employment to respond temporarily to changes in real wage rate, 3) allowed rates of return to capital to respond temporarily to changes in demands for capital.
In generating the baseline projection, we use forecasts for key supply-side macroeconomic variables and assumptions for changes in import protection and export taxes.
I have done gclimate change levyh scenario, in which carbon tax is introduced in Japan to meet the Kyoto target. As many research pointed out, carbon abatement cost in Japan is much higher that other Annex countries. Thus to introduce carbon tax in Japan causes the shift of energy intensive industries, such iron and steel and chemical industry production from Japan and other regions, mainly China and other Asian countries. As the results, unemployment rate increases in Japan and GDP will drop by 0.3% below baseline scenario. In addition, I analyse the impacts on other countries. The effects differs by each country. Australia and New Zealand are one of loser by Japan carbon tax, because Australia and New Zealand are major coal exporters to Japan.
I will do other scenario, say gdown-streamh emission trading in Japan and purchasing gHot-Airh credits from Russia and compare these policy package each other from Economic and Environmental perspectives.


Resource Details (Export Citation) GTAP Keywords
Category: 2004 Conference Paper
Status: Published
By/In: Presented at the 7th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2004
Version:
Created: Hamasaki, H. (4/29/2004)
Updated: Hamasaki, H. (4/29/2004)
Visits: 1,466
No keywords have been specified.


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