"General Equilibrium Models for Global Climate Change"

Alan Manne
Stanford University

This survey begins with the United Nations Framework Convention on Climate Change, and it continues with the Kyoto Protocol. The original book by Nordhaus stimulated a large and growing literature on the economics of climate change. Rather than attempt to describe all these papers in detail, I will cover some of their principle findings through results reported by the Energy Modeling Forum. I will also summarize some of my own work with Richels. Despite its simplicity, our model illustrates some of the most controversial issues in this debate. It provides a perspective on emissions and on taxes to restrain these emissions. It shows some of the difficulties that arise with discounting and benefit-cost analysis.