Global climate change has been on the international environmental agenda for the last decade, but policymakers are still struggling to develop an effective solution to this looming problem. Climate change concerns are based on the idea that greenhouse gases (GHGs), produced primarily from the burning of fossil fuels, accumulate in the earth's atmosphere, trapping heat and causing global temperatures to rise. Although a coordinated global effort to reduce emissions is the preferred starting point, initial efforts to devise an equitable and cost-effective international regime to lower GHG emissions have yielded only mixed results. The most ambitious international regime to be developed thus far, the Kyoto Protocol, suffered a severe setback when the United States announced its withdrawal in 2001. Ironically, U.S. intransigence enabled the European Union (EU) to rally support for the Protocol, and the agreement appears likely to obtain the signatures necessary to enter into force. Russian ratification of the Protocol, anticipated for 2003, will be key to its success. The paradox is that Russia's participation and the United States's absence moves the agreement from one requiring costly emissions reductions for most to one that can be accomplished with little real effort for some countries-though others will still have to enact costly domestic measures-and with very little overall environmental benefit. As the Kyoto Protocol nears the requirements for entry into force, there is a pressing need for a look backward at how we arrived at our current predicament, and a look forward to whether the current agreement can evolve into a truly global regime that brings about real reductions from all major emitters.

© 2003 Georgetown journal of International Affairs

The potential for greenhouse gas (GHG) restrictions in some nations to drive emission increases in other nations, or leakage, is a contentious issue in climate change negotiations. We evaluate the potential for border carbon adjustments (BCAs) to address leakage concerns using an economy-wide model. For 2025, we find that BCAs reduce leakage by up to two-thirds, but result in only modest reductions in global emissions and significantly reduce welfare. In contrast, BCA-equivalent leakage reductions can be achieved by very small emission charges or efficiency improvements in nations targeted by BCAs, which have negligible welfare effects. We conclude that BCAs are a costly method to reduce leakage but such policies may be effective coercion strategies. We also investigate the impact of BCAs on sectoral output and evaluate the leakage contributions of trade and changes in the price of crude oil.

We use a CGE model to investigate the potential of second generation biofuels production under possibilities of land use conversion from natural areas to agricultural land in the U.S, considering the recreational value of forests. We introduce recreational benefits of natural forests through "household" production sectors for hunting and fishing, for wildlife viewing in reserved areas, and wildlife viewing in other forest areas, based on extensive data available in the U.S. about those activities. We test the model assessing the land use changes and welfare impacts from a U.S. climate policy scenario. The new approach resulted in similar land use change as earlier work where land conversion was limited by an elasticity based on observed land supply response. The advantage of the new approach built here using recreation data is that it provides an obviously improved measure of welfare cost of policies that lead to land use change, because the preservation value of the land offsets the increased cost of the policy due to the restriction on use. The results are sensitive to the representation of people's willingness to substitute other inputs for natural land in their recreation experience, parameter not being well investigated empirically. The main contribution of the paper is not for its insights on biofuels potential but for the improved representation of welfare changes from models where the land supply response limits conversion.

© 2008 The Berkeley Electronic Press

Emissions of carbon dioxide from combustion of fossil fuels, which may contribute to long-term climate change, are projected through 2050 using reduced form models estimated with national-level panel data for the period 1950 - 1990. We employ a flexible form for income effects, along with fixed time and country effects, and we handle forecast uncertainty explicitly. We find an "inverse-U"relation with a within-sample peak between carbon dioxide emissions (and energy use) per capita and per captia income. Using the income and population growth assumptions of the Intergovernmental Panel on Climate Change (IPCC), we obtain projections significantly and substantially above those of the IPCC.