We estimate reference CO2 emission projections in the European Union, and quantify the economic impacts of the Kyoto commitment on Member States. We consider the case where each EU member individually meets a CO2 emissions target, applying a country-wide cap and trade system to meet the target but without trade among countries. We use a version of the MIT Emissions Prediction and Policy Analysis (EPPA) model, here disaggregated to separately include 9 European Community countries and commercial and household transportation sectors. We compare our results with that of four energy-economic models that have provided detailed analyses of European climate change policy. In the absence of specific additional climate policy measures, the EPPA reference projections of carbon emissions increase by 14% from 1990 levels. The EU-wide target under the Kyoto Protocol to the Framework Convention on Climate Change is a reduction in emissions to 8% below 1990 levels. EPPA emissions projections are similar to other recent modeling results but there are underlying differences in energy and carbon intensities among the projections. If EU countries were to individually meet the EU allocation of the Community-wide carbon cap specified in the Kyoto Protocol, we find using EPPA that carbon prices vary from $91 in the United Kingdom to $385 in Denmark; welfare costs range from 0.6 to 5%.

Wind resource in the continental and offshore United States has been reconstructed and characterized using metrics that describe, apart from abundance, its availability, persistence and intermittency. The Modern Era Retrospective-Analysis for Research and Applications (MERRA) boundary layer flux data has been used to construct wind profile at 50m, 80m, 100m and 120m turbine hub heights. The wind power density estimates at 50m are qualitatively similar to those in the US wind atlas developed by the National Renewable Energy Laboratory (NREL), but quantitatively a class less in some regions, but are within the limits of uncertainty. The wind speeds at 80m were quantitatively and qualitatively close to the NREL wind map. The possible reasons for overestimation by NREL have been discussed. For long tailed distributions like those of the wind power density, the mean is an overestimation and median is suggested for summary representation of the wind resource. The impact of raising the wind turbine hub height on metrics of abundance, persistence, variability and intermittency is analyzed. There is a general increase in availability and abundance of wind resource but the there is an increase in intermittency in terms of level crossing rate in low resource regions. The key aspect of geographical diversification of wind farms to mitigate intermittency - that the wind power generators are statistically independent - is also tested. This condition is found in low resource regions like the east and west coasts. However, in the central US region which has rich resource the condition fails as widespread coherent intermittence in wind power density is found. Thus large regions are synchronized in having wind power or lack thereof. Thus, geographical diversification in this region needs to be planned strategically. The annual distribution of hourly wind power density shows considerable variability and suggests wind floods and droughts that roughly correspond with La-Nina and El-Nino years respectively. The collective behavior of wind farms in seven Independent System Operator (ISO) areas has also been studied. The generation duration curves for each ISO show that there is no aggregated power for some fraction of the time. Aggregation of wind turbines mitigates intermittency to some extent, but each ISO has considerable fraction of time with less than 5% capacity. The hourly wind power time series show benefit of aggregation but the high and low wind events are lumped in time, thus corroborating the result that the intermittency is synchronized. The time series show that there are instances when there is no wind power in most ISOs because of large-scale high pressure systems. An analytical consideration of the collective behavior of aggregated wind turbines shows that the benefit of aggregation saturates beyond ten units. Also, the benefit of aggregation falls rapidly with temporal correlation between the generating units.

In 2003 Japan proposed a Climate Change Tax to reduce its CO2 emissions to the level required by the Kyoto Protocol. If implemented, the tax would be levied on fossil fuel use and the revenue distributed to several sectors of the economy to encourage the purchase of energy efficient equipment. Analysis using the MIT Emissions Prediction and Policy Analysis (EPPA) model shows that this policy is unlikely to bring Japan into compliance with its Kyoto target unless the subsidy encourages improvement in energy intensity well beyond Japan's recent historical experience. Similar demand-management programs in the U.S., where there has been extensive experience, have not been nearly as effective as they would need to be to achieve energy efficiency goals of the proposal. The Climate Change Tax proposal also calls for restricting Japan's participation in the international emission trading. We consider the economic implications of limits on emissions trading and find that they are substantial. Full utilization of international emission trading by Japan reduces the carbon price, welfare loss, and impact on its energy-intensive exports substantially. The welfare loss with full emissions trading is one-sixth that when Japan meets its target though domestic actions only, but Japan can achieve substantial savings even under cases where, for example, the full amount of the Russian allowance is not available in international markets.

The threat of climate change proposes difficult problems for regulators and decision-makers in terms of uncertainties, varying exposures to risks and different attitudes towards risk among nations. Impact and cost assessments aim to alleviate some of these difficulties by attempting to treat the costs of inaction, regulation and adaptation. For such assessments to be relevant, they must deal with regions individually to estimate costs associated with different regulations since across regions the impacts from climate change and climate change regulation are heterogeneous. Canada, and her oil sands industry, is the focus of this CO2 mitigation cost and climate change impacts study. Two Canadian policies, in line with the stated goals of the two largest Canadian political parties, have been modeled using MIT’s Emission Prediction and Policy Analysis tool to better understand the costs of the policies and the emission reductions that they will achieve. Welfare losses reaching 3.3% (in 2050) for the goals outlined in the Canadian government’s “Climate Action Plan” and 8.3% (in 2050) for the goal to meet Kyoto and post-Kyoto targets put forward by the opposition are predicted by the model. Oil sands upgrading/refining experiences severe carbon leakage while Oil Sands production is more resilient and may present less regulatory risk for investment. Gasification to produce natural gas substitutes could potentially be undermined by strict CO2 policy unless optimistic carbon capture technology emerges. The results are highly dependent on whether an international carbon trading regime exists and whether bio-fuels emerge as a large scale, affordable, alternative to fossil fuels. The results are also dependent, to a lesser extent, on international CO2 policy.