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GTAP Resources: Resource Display

GTAP Resource #1963

"Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy"
by Roson, Roberto and Francesco Bosello


Abstract
Future energy demand will be affected by changes in prices and income, but also by other factors, like temperature levels and variations. In particular, climate change is expected to affect energy demand worldwide, through changes in the demand for heating and cooling.
This paper draws upon an econometric study, which disentangles the contribution of temperature in the dermination of the annual regional demand for energy goods. Combining estimates of temperature elasticities with scenarios of future climate change, it is possible to assess variations in energy demand induced by the global warming.
We use this information to force a change in the demand structure of households and firms in a CGE model of the world economy, in a set of simulation exercises. The changing demand structure triggers a structural adjustment process, influencing trade flows, regional competitiveness of industries and regions, and welfare. We also consider the possible existence of imperfect competition in the energy markets, analyzing the overall impact of climate change, due to changes in energy demand, under a series of alternative specifications of market structure and model closure. We discuss how market power can be measured and how imperfect competition can be introduced in the CGE setting, highlighting the consequences of imperfect competition on the simulation results, especially from a distributional perspective.


Resource Details (Export Citation) GTAP Keywords
Category: 2006 Conference Paper
Status: Published
By/In: Presented at the 9th Annual Conference on Global Economic Analysis, Addis Ababa, Ethiopia
Date:
Version:
Created: Roson, R. (4/20/2006)
Updated: Roson, R. (4/20/2006)
Visits: 2,057
No keywords have been specified.


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