This paper presents a conceptual, integrated modelling framework and provides an example tradeoff analysis between economic development goals and climate change adaptation strategies. Case study results for tradeoffs between water entering Egypt and predicted economic consequences are discussed and lessons learned (e.g. the nature and limitations of the tradeoff analysis) are summarized. Tradeoff analysis results were illustrated using Stochastic Efficiency with Respect to a Function (SERF) stochastic dominance methodology (including certainty equivalent measures of the GDP and the quantity of water), and used recent projected climate change scenarios and economic indicators. Results show that some climate change adaptation strategies may coincide with economic development agenda and objectives (such as more water release from the Aswan High Dam). Some strategies may, however, contradict existing regional economic development goals. The conceptual framework and methods developed and illustrated here have broad applications to trans-boundary water issues in Africa and elsewhere.

 As a result of the allocation of emissions reductions, and the differential willingness of countries to ratify, it turns out that Russia is a central player in the Kyoto Protocol. With the U.S. out and Japan and the EU ratifying, the Protocol cannot enter into force without Russian ratification. In part, U.S. rejection of the Kyoto Protocol resulted from the fact that, had the U.S. been in, its least costly road to implementation would have involved large purchases of emissions credits from Russia. With the U.S. out, Russian credits are worth much less but Russia may be able to exploit monopoly power to increase the value of those permits, or Russia could bank permits on the expectation that prices will rise in the future, perhaps as a result of the U.S. reentry into the Protocol in later periods. The Russian decision is more complex, however, in that it is also a major fossil fuel exporter. To the extent it withholds permits from the market, fossil energy prices are depressed further, and the value of its exports of energy are reduced. Thus, Russia faces a tradeoff between maximizing its permit revenue and its revenue from fossil energy exports. We develop this problem as a simple dynamic optimization problem and calibrate the model to the results of two CGE models (EPPA and GEMINI-E3) that fully capture interactions of energy trade, permit trade, and permit and energy prices. We show that carbon prices are relatively insensitive to Russia's behaviors when the U.S. is assumed to participate. It also shows that, in the absence of U.S. participation, the impact of market power by Russia and Ukraine is largely dependent on the elasticity of demand for permits. Finally, we focus on the uncertainty about the supply of CDM by developing countries. It is shown that permit prices are relatively insensitive to CDM supply in the short run but not in the long run.

This study explores why international joint ventures (IJVs) based on the global South may meet with only partial success in nurturing local technological capability. The experience of China’s passenger-vehicle sector demonstrates that in the existence of a substantial technological capability gap between alliance partners, the IJV arrangement is likely to create a “passive” learning mode, and learners using this IJV arrangement may be able to strengthen their production capability but leaving their project execution and innovation capabilities largely undeveloped.

We describe several scenarios for economic development and energy use in East Asia based on the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium model of the world economy. Historic indicators for Asian economic growth, energy use, and energy intensity are discussed. In the Baseline scenario, energy use in East Asia is projected to increase from around 120 EJ in 2005 to around 220 EJ in 2025. Alternative scenarios were developed to consider: (1) How fast might energy demand grow in East Asia and how does it depend on key uncertainties? (2) Do rising prices for energy affect growth in the region? (3) Would growth in East Asia have a substantial effect on world energy markets? (4) Would development of regional gas markets have substantial effects on energy use in the region and on gas markets in other regions? Briefly, we find that with more rapid economic growth demand in East Asia could reach 430 EJ by 2025, almost twice the level in the Baseline; rising energy prices place a drag on growth of countries in the region of 0.2 to 0.6% per year; world crude oil markets could be substantially affected by demand growth in the region, with the price effect being as much as $25 per barrel in 2025; and development of regional gas markets could expand gas use in East Asia while leading to higher gas prices in Europe.