Kyoto permits’ price will not be low: Exploring future commitments and the role of banking Vincent...
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Transcript of Kyoto permits’ price will not be low: Exploring future commitments and the role of banking Vincent...
Kyoto permits’ price will not be low:
Exploring future commitments and the role of banking
Vincent van SteenbergheUcL-IRES et CORE
Purpose (1)
• Main results of MacGEM (2008 – 2012) :
-2,2
-2
-1,8
-1,6
-1,4
-1,2
-1
-0,8
-0,6
-0,4
-0,2
0
0,2
0,4
EU15 OEU AUZ JAP CAN An.-B* CEU USA
To
tal c
os
ts /
GD
P 2
010
Kyoto Protocol (price: 21.93 $1995/tCO2)
Without USA (price: 10.03 $1995/tCO2)
Without USA with sinks (price: 5.38 $1995/tCO2)
Without USA with sinks with Commitment Period Reserve (price:9.30 $1995/tCO2)
Without USA with sinks with Commitment Period Reserve withimperfect domestic policies in Annex-B (price: 12.05 $1995/tCO2)
Purpose (2)
• Extend MacGEM model to future commitment periods in order to analyse– Future participation and commitments of Annex B and non-
Annex B countries– Future burden sharing arrangements – The role of banking– The impact of these elements on Kyoto permits price
• MacGEM(+) is an ‘easy to use’ model based on Marginal Abatement Cost curves for CO2 emissions
• MacGEM+ offers large possibilities of sensitivity analyses and focuses on key parameters (technological progress, discount rate, baseline emissions, efficiency of domestic policies, …)
Content of the presentation
• Model of banking with MACs• Set-up of MacGEM+• Possible scenarios• Simulations
– Reference scenarios– Participation structure– Allocation rules– Hot air issue
• Sensitivity analysis
Model of banking with MACs (1)
• Illustration of trading between countries without inter-temporal trades
E i
price2 price2
Permits i Permits j
TRADES 2
MAC i
MAC j
E j
Total permits 2
price1 price1
Permits i Permits j
TRADES 1
MAC i
MAC j
E iE j
Total permits 1
Period 1 Period 2
Model of banking with MACs (2)
Price(1,2) price2
Permits i Permits j
MAC i
MAC j
E j
Total permits 2
price1
Permits i Permits j
BANK 1
MAC i
MAC j
E iE j
Total permits 1
BANK 2
Period 1 Period 2
• Illustration of trading between countries with inter-temporal trades
Model of banking with MACs (3)
Period1 2 3
Price
Period1 2 3
Price
Price (1-3)
Period1 2 3
Price
Price (1-2)
Period1 2 3
Price
Price (1-3)
Price (1-2)
No banking Banking 1-3
Banking 1-3Banking 1-2
Model of banking with MACs (4)
• Why ‘two consecutive periods’ ? Because, if profitable, banking– Decreases price of last period (which does not impede on banking
opportunities with ‘future’ periods –and even fosters it)– Increases price of first period (which does not impede on banking
opportunities with ‘previous’ periods –and even fosters it)
Period1 2 3
Price
Price (1-4)
Price (1-2)
Price (3-4)
4
• Model solved by loops until only ‘decreasing steps’
• Each loop: compute banking between two consecutive periods iff banking is profitable (and if so, consider then these two periods as a single one)
Model of banking with MACs (5)
• Remarks on the use of MACs:– Advantage of MACs: ‘easy to use’ model allowing much
flexibility in, for instance, participation structure– Drawback of MACs: dynamics only via inter-temporal trades
of permits (exogenous technological change)
Content of the presentation
• Model of banking with MACs• Set-up of MacGEM+• Possible scenarios• Simulations
– Reference scenarios– Participation structure– Allocation rules– Hot air issue
• Sensitivity analysis
Set-up (1)
• 5 commitment periods of 5 years (2008 – 2032)• 15 regions:
label name CompositionEU15 European UnionOEU other Europe Iceland, Norway, SwitzerlandCEU Eastern Europe and former
Soviet UnionBulgaria, Czech-Rep, Hungary, Poland, Romania, Slovak-Rep, Slovenia, formerSoviet Union
AUZ Australazia Australia, New ZealandJAP JapanCAN CanadaUSA USAMED Mediterranian Turkey, Morocco, Algeria, Egypt, Libya, TunisiaMEA Middle East Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia,
Syria, United Arab Emirates, YemenAFR Africa Angola, Benin, Botswana, Burkina-Fasso, Burundi, Cameroon, Cape Verde, Central
African Republic, Chad, Comoros, Congo, Republic of Congo, Djibouti, Ethiopia,Gabon, Gambia, Ghana, Guinea, Guinea Bissau, Ivory Coast, Kenya, Leshoto,Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia,Niger, Nigeria, Reunion, Rwanda, Senegal, Seychelles, Sierra-Leone, Somalia, SouthAfrica, Sudan, Swaziland, Tanzania, Togo, Uganda, Zambia, Zimbabwe
CHI China China, Hong KongIND IndiaASIA Asia South Korea, Indonesia, Malaysia, Philippine, Singapore, Thailand, Vietnam, Taiwan,
Sri-Lanka, Bangladesh, Nepal, PakistanSAM South America Costa-Rica, Cuba, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras,
Jamaica, Antilles, Nicaragua, Panama, Trinidad-Tobago, Venezuela, Colombia,Bolivia, Ecuador, Peru, Argentina, Brazil, Chile, Uruguay, Paraguay
ROW rest of world
Set-up (2a)
• Baseline emissions, GDP and population: IPCC SRES scenarios (IMAGE2)
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 21000
5
10
15
20
25
30
35IPCC SRES Scenarios: world CO2 emissions (GtC)
A1BA1TA1FA2B1B2Mean
Set-up (2b)
• Population from SRES
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 21006
8
10
12
14
16IPCC SRES Scenarios: world population
A1 B1A2B2Mean
Setup (3a)
• Marginal abatement cost curves in 2010 from GEM-E3-World (Annex B)
0
20
40
60
80
100
120
140
160
180
200
-0.3
0
-0.2
7
-0.2
4
-0.2
1
-0.1
8
-0.1
5
-0.1
2
-0.0
9
-0.0
6
-0.0
3
0.0
0
0.0
3
0.0
6
0.0
9
0.1
2
0.1
5
0.1
8
0.2
1
0.2
4
0.2
7
0.3
0
0.3
3
percentage emission abatement w.r.t. 1990
US
$1
99
5 p
er
ton
of C
O2
EU15: 8%
USA: 7%
JAP: 6%
OEU: 3.8%
CEU: 1.4%
CAN: 6%
AUZ: 2.7%
p=21.9$
5%
Set-up (3b)
• MACs in 2010 extended to subsequent commitment periods with– Increasing efficiency of domestic abatement policies:
• A set of MACs has been computed assuming some inefficiency in domestic abatement policies (same percentage of emission reductions in every economic sector rather than efficient abatement policy)
• Parameter of domestic efficiency which generates new MACs
– Parameter of technological progress:• Affects marginal absolute abatement costs in a multiplicative
way • Value differs across regions: from x% (min) to y% (max)
according to rate of bau emissions increase between 2010 and 2030
• Needs to be further analysed …!
Set-up (4)
• Discount rate: see US Acid Rain program (Ellerman, 2002)
• CDM: increasing accessibility and decreasing trans. costs
• Sinks in 2008-2012: free and up to limits negotiated in Bonn and Marrakesh
Reference parameter values
1 technological progress From 5% to 25% (same each period)
2 Efficiency of domestic policies From 75% (2010) to 95% (2030)
3 Discount rate 5% per year
4 Baselines SRES Mean
5 CDM access 30% (2010), 40% (2015), 50% (2020-2030)CDM transaction costs 20% (2010), 15% (2015), 10% (2020-2030)
6 Sinks No sinks after 2012
Content of the presentation
• Model of banking with MACs• Set-up of MacGEM+• Possible scenarios• Simulations
– Reference scenarios– Participation structure– Allocation rules– Hot air issue
• Sensitivity analysis
Scenarios (1)
• In each period, set participation of– Annex B countries (+domestic policy when no participation) – non-Annex B countries
• Emission (reduction) objectives …– Set world emissions objective in periods 4 (2025) and 5 (2030)– Then world objectives in periods 2 (2015) and 3 (2020) are on
linear trajectory between period 1 (Kyoto – 2010) and period 4 objectives
– Possibility to set objectives for each (group of) region(s)
• … and their allocation– Several allocation rules are analysed: ‘Kyoto’, egalitarian,
grandfathering, ability to pay, energy intensity, … and the ‘Jacoby et al.’ allocation-participation rule. Convergence towards egalitarian rule also possible.
Scenarios (2)
Reference scenarios
Participation 1 non-Annex B commitment All non-Annex B countries in period 3 (2020)
2 Annex B participation USA in period 2 (2015)
2 bis (domestic policy) USA: -5% in period 1 (2010)
Objectives 3 World emissions: WEAK 34,0 GtCO2 in 2025 - 35,0 GtCO2 in 2030
World emissions: STRONG 25,5 GtCO2 in 2025 - 24,5 GtCO2 in 2030
4 Allocation rule Kyoto with convergence in 2080
Scenarios (2 bis)
• Quotas in each region and world bau emissions
Quotas (GtCO2); SRES=Mean; Scenario WEAK
2010 2015 2020 2025 20300
5
10
15
20
25
30
35
40
45
USACANE15OEUCEUAUZJAPMEDMEAAFRCHIINDASISAMROW
Quotas (GtCO2); SRES=Mean; Scenario STRONG
2010 2015 2020 2025 20300
5
10
15
20
25
30
35
40
45
USACANE15OEUCEUAUZJAPMEDMEAAFRCHIINDASISAMROW
Content of the presentation
• Model of banking with MACs• Set up of MacGEM+• Possible scenarios• Simulations
– Reference scenarios– Participation structure– Allocation rules– Hot air issue
• Sensitivity analysis
SimulationsReference scenario WEAK (1)
• Allocation:– Far from egalitarian in 2030
– Hot air for IND (0.292 GtCO2 in 2020 to 0.554 GtCO2 in 2030) and for AFR (0.021 GtCO2 in 2020)
• Permits price and amount of banking:
Price : no banking - banking ($95/tCO2)
2010 2015 2020 2025 20300
5
10
15
20
25
30
35Amount of banking (GtCO2)
2010 2015 2020 2025 2030-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
SimulationsReference scenario WEAK (2)
• TradesTrades of quotas (net sales in GtCO2)
Each country :2010,2015,2020,2025,2030USA CAN E15 OEU CEU AUZ JAP MED MEA AFR CHI IND ASI SAM ROW
-1
-0.5
0
0.5
1
1.5
SimulationsReference scenario WEAK (3)
• Discounted costs periods 1 - 3
Discounted total cost per period (%of GDP):
Each country :2010,2015,2020USA CAN E15 OEU CEU AUZ JAP MED MEA AFR CHI IND ASI SAM nAB
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
SimulationsReference scenario WEAK (4)
• Impact of banking on costs over the five commitment periods
Disc. total cost all periods (%of GDP):No Banking - Banking
USA CAN E15 OEU CEU AUZ JAP MED MEA AFR CHI IND ASI SAM nAB-0.5
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
Disc. total cost all periods (billion $95):No Banking - Banking
USA CAN E15 OEU CEU AUZ JAP MED MEA AFR CHI IND ASI SAM nAB-20
-10
0
10
20
30
40
SimulationsReference scenario STRONG (1)
• Allocation:– Hot air only for AFR in 2020 (0.045 GtCO2)
• Permits price and amount of banking:
Price : no banking - banking ($95/tCO2)
2010 2015 2020 2025 20300
20
40
60
80
100Amount of banking (GtCO2)
2010 2015 2020 2025 2030-1.5
-1
-0.5
0
0.5
1
1.5
2
SimulationsReference scenario STRONG (2)
• Impact of banking on costs over the five commitment periodsDisc. total cost all periods (%of GDP):No Banking - Banking
USA CAN E15 OEU CEU AUZ JAP MED MEA AFR CHI IND ASI SAM nAB-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
1.4
Disc. total cost all periods (billion $95):No Banking - Banking
USA CAN E15 OEU CEU AUZ JAP MED MEA AFR CHI IND ASI SAM nAB-50
0
50
100
150
200
250
300
Assumption: participating countries receive amount of permits
independent of participation structure
SimulationsParticipation structure (1)
Participation structure USA: 2015 USA: 2015 USA: 2020
nAB: 2015 nAB: 2020 nAB: 2020
Weak Price bank, (disc) ($95/tCO2) 9,9 10,5 10,1
World emissions (GtCO2) 161,021 161,129 162,182
Banking in 2010 (GtCO2) 0,457 0,503 0,472
in 2015 (GtCO2) 0,653 -0,203 0,373
in 2020 (GtCO2) 0,062 0,256 0,125
Total costs EU15 (% GDP) 0,079 0,082 0,08
Total costs non-Annex B (% GDP) 0,019 0,021 0,023
Strong Price bank, (disc) ($95/tCO2) 31,2 31,8 31,6
World emissions (GtCO2) 133,521 135,132 136,641
Banking in 2010 (GtCO2) 1,731 1,762 1,751
in 2015 (GtCO2) 1,793 1,216 1,413
in 2020 (GtCO2) -0,273 -0,143 -0,187
Total costs EU15 (% GDP) 0,338 0,342 0,34
Total costs non-Annex B (% GDP) 0,501 0,457 0,458
• Significant change in world emissions (period 2)• Limited effect on prices• Banking
– Stable in period 1– Increase in period 2 and decrease in period 3
SimulationsParticipation structure (2)
• Only on ‘strong’ scenario• Changes in allocation rules:
– ‘Soft entry’ for non-Annex B countries– Change in year of convergence– Grandfathering (1990) towards egalitarianism– Jacoby, Schmalensee and Wing allocation-participation rule
SimulationsOther allocation rules (0)
• ‘Soft entry’ for non-Annex B countries: distribution of permits according their bau emissions for their first commitment period (2020)– World emissions over five periods increase: from 135.1 to
139.5 GtCO2 (x5)– Discounted permits’ price decreases: from 31.8$ to 27.7$– Banking in period 3 increases considerably: from –0.143 to
+3.352 GtCO2, but decreases in periods 1 and 2– Total discounted costs for Annex B regions: -5 to -10 %– Total discounted costs for non-Annex B regions: -50 %, with
large gains in period 3
SimulationsOther allocation rules (strong) (1)
• Change in year of convergence
SimulationsOther allocation rules (strong) (2)
Period of convergence 2030 2050 2080 2100
Quotas per head in 2030 % var <--- % var <--- % var --->
(tCO2) USA 2,9 -68 9,0 -22 11,6 7 12,4
EU15 2,9 -46 5,4 -16 6,4 5 6,7
CEU 2,9 -52 6,1 -18 7,5 5 7,9
IND 2,9 59 1,8 34 1,4 -10 1,2
Sales (net) in 2020 % var <--- % var <--- % var --->
(% of quotas) USA -50,8 198 -17,0 146 -6,9 -38 -4,3
EU15 -54,1 72 -31,5 33 -23,7 -9 -21,6
OEU -57,6 43 -40,2 19 -33,9 -5 -32,2
CEU -19,5 -1088 2,0 -78 8,9 21 10,8
nAB 22,1 104 10,8 115 5,0 -37 3,2
Costs TOT(bank) % var <--- % var <--- % var --->
(% of current GDP) USA 0,833 76 0,475 45 0,328 -13 0,286
EU15 0,577 41 0,410 20 0,342 -6 0,322
CEU 2,482 186 0,868 293 0,221 -85 0,034
nAB -0,406 -298 0,205 -55 0,457 16 0,531
• Grandfathering (1990) towards egalitarianism (in 2080)– Total disc. Costs for Annex B regions: -50%– Total disc. Costs for non-Annex B regions: +200%
• Jacoby, Schmalensee and Wing rule (calibration such that same total world emissions):– Participation structure very different from REF scenarios: MEA
and SAM in period 2 ; ASI in period 3; ROW in period 4 and MED in period 5 (AFR, CHI and IND join later)
– Permits’ price increases from 32.2$ to 39.6$– Annex B total costs: decrease for USA and CEU; increase for
the others (+50%)– Non-Annex B total costs: larger disparity with large gains for
AFR, CHI and IND (all together: -45%)
SimulationsOther allocation rules (strong) (3)
Not an ‘issue’ anymore since no monopoly effect over all periods
SimulationsMarket power from hot air (CEU in 2010)
% hot air restriction 2010 2015 2020 Total (5 periods) No Banking Tot
Weak 0% (REF) Costs CEU -0,740 -0,215 0,025 -0,065 0,035Price 10,5
25% Costs CEU -0,643 -0,218 0,023 -0,044 0,022Price 10,6
50% Costs CEU -0,543 -0,222 0,021 -0,022 0,014Price 10,7
75% Costs CEU -0,458 -0,237 0,020 -0,006 0,010Price 11,1 11,1 10,8
100% Costs CEU -0,375 -0,263 0,020 0,007 0,013Price 11,8 11,8 10,8
Strong 0% (REF) Costs CEU -2,772 -0,578 0,766 0,221 0,877Price 31,8
25% Costs CEU -2,483 -0,585 0,763 0,288 0,864Price 31,9
50% Costs CEU -2,190 -0,592 0,759 0,355 0,856Price 32,0
75% Costs CEU -1,892 -0,600 0,756 0,423 0,852Price 32,2
100% Costs CEU -1,590 -0,607 0,752 0,492 0,855Price 32,3
Content of the presentation
• Model of banking with MACs• Set up of MacGEM+• Possible scenarios• Simulations
– Reference scenarios– Participation structure– Allocation rules– Hot air issue
• Sensitivity analysis
Sensitivity analysis (1)
• Discount rate: 2% ; 8% (REF: 5%)– Strong effects on amount of banking and therefore on
prices, but weak impacts on total discounted costs
• Baselines: SRES= A1F ; B1 (REF: Mean)– Important effect on emission reductions, on world total
emissions and on prices– Sharp increase in total costs for non-Annex B countries and
for CEU under the A1F (high) baseline
• Technological progress: from 7.5% to 30% ; from 2.5% to 20% (REF: from 5% to 25%)– No spectacular effect on prices– Decrease in tech. Progress Increase in Banking– Similar variations of total costs in all regions
Sensitivity analysis (2)
• Efficiency of domestic policies: less efficient (50% in 2010 to 75% in 2030) ; full efficiency (100%) (REF: 75% in 2010 to 95% in 2030)– Limited impacts ; more on Annex B than on nAB total costs
• CDM efficiency: less efficient ; more efficient– Limited impacts ; very small impacts on Annex B total costs
Sensitivity analysis (3)
Discount rate a 2%
b 5%
c 8%
a b c a b c
World objectives Weak Strong
Price Banking (disc) 2010 15,7 10,5 8,4 47,2 31,8 22,0
2015 15,7 10,5 8,4 47,2 31,8 22,0
2020 15,7 10,5 7,3 47,2 31,8 22,0
Banking 2010 0,849 0,503 0,343 2,513 1,762 1,229
2015 0,252 -0,203 -0,343 2,202 1,216 0,461
2020 0,610 0,256 0,000 0,615 -0,143 -0,723
Total world emissions (/5) 161,129 161,129 161,129 135,132 135,132 135,132
Total disc, costs USA 0,102 0,090 0,078 0,377 0,328 0,276
(%GDP) EU15 0,094 0,082 0,074 0,386 0,342 0,290
CEU -0,085 -0,065 -0,091 0,166 0,221 0,209
IND -0,300 -0,280 -0,250 -0,073 -0,078 -0,088
nAB 0,023 0,021 0,012 0,509 0,457 0,383
Sensitivity analysis (4)
Baselines SRES a A1F (high)
b Mean
c B1 (low)
a b c a b c
World objectives Weak Strong
Price Banking (disc) 2010 21,0 10,5 6,7 45,4 31,8 22,5
2015 21,0 10,5 6,7 45,4 31,8 22,5
2020 21,0 10,5 4,5 45,4 31,8 22,5
Banking 2010 1,077 0,503 0,318 2,355 1,762 1,342
2015 0,897 -0,203 -0,318 2,317 1,216 0,602
2020 0,947 0,256 0,000 0,542 -0,143 -0,526
Total world emissions (/5) 161,970 161,129 160,241 135,970 135,132 134,242
Total disc, costs USA 0,166 0,090 0,035 0,458 0,328 0,202
(%GDP) EU15 0,199 0,082 0,034 0,566 0,342 0,211
CEU 0,250 -0,065 -0,159 1,306 0,221 -0,282
IND -0,229 -0,280 -0,155 1,388 -0,078 -0,420
nAB 0,300 0,021 -0,009 1,450 0,457 0,206
Sensitivity analysis (5)
Techn, progress a 7,5% to 30%
b 5% to 25%
c 2,5% to 20%
a b c a b c
World objectives Weak Strong
Price Banking (disc) 2010 9,3 10,5 11,8 28,1 31,8 35,7
2015 9,3 10,5 11,8 28,1 31,8 35,7
2020 9,3 10,5 11,8 28,1 31,8 35,7
Banking 2010 0,413 0,503 0,595 1,568 1,762 1,959
2015 -0,341 -0,203 -0,069 0,920 1,216 1,505
2020 0,139 0,256 0,364 -0,395 -0,143 0,088
Total world emissions (/5) 161,129 161,129 161,129 135,132 135,132 135,132
Total disc, costs USA 0,081 0,090 0,099 0,301 0,328 0,356
(%GDP) EU15 0,073 0,082 0,092 0,307 0,342 0,378
CEU -0,053 -0,065 -0,078 0,222 0,221 0,217
IND -0,261 -0,280 -0,300 -0,143 -0,078 -0,006
nAB 0,016 0,021 0,026 0,387 0,457 0,532
Sensitivity analysis (6)
Efficiency dom, pol, 2010 2015 2020 2025 2030
a 50% 55% 60% 65% 70%
b 75% 80% 85% 90% 95%
c 100% 100% 100% 100% 100%
a b c a b c
World objectives Weak Strong
Price Banking (disc) 2010 12,5 10,5 9,7 37,7 31,8 29,2
2015 12,5 10,5 9,7 37,7 31,8 29,2
2020 12,5 10,5 9,7 37,7 31,8 29,2
Banking 2010 0,547 0,503 0,548 1,853 1,762 1,868
2015 -0,149 -0,203 -0,112 1,329 1,216 1,424
2020 0,253 0,256 0,374 -0,135 -0,143 0,103
Total world emissions (/5) 161,129 161,129 161,129 135,132 135,132 135,132
Total disc, costs USA 0,110 0,090 0,081 0,414 0,328 0,290
(%GDP) EU15 0,098 0,082 0,075 0,414 0,342 0,309
CEU -0,070 -0,065 -0,067 0,276 0,221 0,176
IND -0,339 -0,280 -0,253 -0,165 -0,078 -0,035
nAB 0,020 0,021 0,022 0,509 0,457 0,439
Sensitivity analysis (7)
CDM efficiency 2010 2015 2020 2025 2030
a Access, 15% 20% 25% 25% 25%
Trans, costs 40% 30% 20% 20% 20%
b Access, 30% 40% 50% 50% 50%
Trans, costs 20% 15% 10% 10% 10%
c Access, 50% 60% 70% 70% 70%
Trans, costs 10% 7,50% 5% 5% 5%
a b c a b c
World objectives Weak Strong
Price Banking (disc) 2010 12,3 10,5 10,1 33,0 31,8 30,4
2015 12,3 10,5 10,1 33,0 31,8 30,4
2020 10,8 10,5 10,1 33,0 31,8 30,4
Banking 2010 0,376 0,503 0,769 1,353 1,762 2,304
2015 -0,376 -0,203 0,127 0,517 1,216 1,894
2020 0,328 0,256 0,113 0,122 -0,143 -0,434
Total world emissions (/5) 161,129 161,129 161,129 135,132 135,132 135,132
Total disc, costs USA 0,093 0,090 0,088 0,328 0,328 0,327
(%GDP) EU15 0,088 0,082 0,080 0,350 0,342 0,333
CEU -0,114 -0,065 -0,051 0,164 0,221 0,278
IND -0,268 -0,280 -0,283 0,031 -0,078 -0,164
nAB 0,028 0,021 0,014 0,524 0,457 0,402
Conclusions
• Banking may have very important impacts on prices (especially in the Kyoto period)
• Level of banking in the Kyoto period may be well above CEU’s hot air
• Banking favours non-Annex B regions and CEU while it increases total costs for the other Annex B regions
• No monopoly effect of CEU due to hot air in the Kyoto period
• High sensitivity to discount rate and baseline emissions
• Need to calibrate technological progress…! (? function of actual previous reductions + baseline ?)