Mattoo, AadityaSubramanian, Arvindvan der Mensbrugghe, DominiqueHe, Jianwu2012-03-192012-03-192009-11-01https://hdl.handle.net/10986/4317Most economic analyses of climate change have focused on the aggregate impact on countries of mitigation actions. The authors depart first in disaggregating the impact by sector, focusing particularly on manufacturing output and exports because of the potential growth consequences. Second, they decompose the impact of an agreement on emissions reductions into three components: the change in the price of carbon due to each country s emission cuts per se; the further change in this price due to emissions tradability; and the changes due to any international transfers (private and public). Manufacturing output and exports in low carbon intensity countries such as Brazil are not adversely affected. In contrast, in high carbon intensity countries, such as China and India, even a modest agreement depresses manufacturing output by 6-7 percent and manufacturing exports by 9-11 percent. The increase in the carbon price induced by emissions tradability hurts manufacturing output most while the Dutch disease effects of transfers hurt exports most. If the growth costs of these structural changes are judged to be substantial, the current policy consensus, which favors emissions tradability (on efficiency grounds) supplemented with financial transfers (on equity grounds), needs re-consideration.CC BY 3.0 IGOADVERSE EFFECTSAGGREGATE DEMANDAGGREGATE PRODUCTIONAIRAIR TRANSPORTALLOCATIONALLOWANCEATMOSPHEREATMOSPHERIC CONCENTRATIONATMOSPHERIC CONCENTRATIONSATPBASELINE EMISSIONSBILATERAL TRADECARBONCARBON CAPTURECARBON CONTENTCARBON CONTENT OF ENERGYCARBON DIOXIDECARBON EMISSIONSCARBON FERTILIZATIONCARBON INTENSITIESCARBON INTENSITYCARBON MARKETCARBON OFFSETSCARBON PRICECARBON PRICESCARBON TAXCARBON-INTENSIVE MANUFACTURINGCARBONIZATIONCH4CHEMICALSCLEAN ENERGYCLIMATECLIMATE CHANGECLIMATE CHANGE MITIGATIONCLIMATE CHANGE MODELCLIMATE CHANGE NEGOTIATIONSCLIMATE POLICYCO2COALCOMBUSTIONCOMPOSITION OF OUTPUTCONSUMER DEMANDCOSTS OF CLIMATE CHANGECRUDE OILCULTIVATED LANDDEMAND FOR ENERGYDOMESTIC CARBONDOMESTIC EMISSIONSDOMESTIC EMISSIONS REDUCTIONSDOMESTIC PRODUCTIONECONOMIC ACTIVITYECONOMIC ANALYSESECONOMIC ANALYSES OF CLIMATE CHANGEECONOMIC GROWTHECONOMIC MODELECONOMIC MODELSELASTICITY OF SUBSTITUTIONELECTRICITYELECTRICITY PRODUCTIONEMISSIONEMISSION ABATEMENTEMISSION CUTSEMISSION LEVELSEMISSION LIMITSEMISSION REDUCTIONEMISSION REDUCTIONSEMISSION RIGHTSEMISSION TAXESEMISSIONSEMISSIONS CUTSEMISSIONS LEVELSEMISSIONS PERMITSEMISSIONS QUOTASEMISSIONS REDUCTIONEMISSIONS REDUCTIONSEMISSIONS RIGHTSEMISSIONS SCENARIOSEMISSIONS TARGETSEND-USER PRICEENERGY EFFICIENCYENERGY INTENSITYENERGY INTENSIVEENERGY INTENSIVE MANUFACTURINGENERGY MARKETSENERGY POLICYENERGY PRICESENERGY USEENERGY-INTENSIVE GOODSENERGY-INTENSIVE MANUFACTURINGENVIRONMENTAL IMPACTENVIRONMENTAL POLICYEXCHANGE RATEEXTREME SCENARIOF-GASESFATSFERROUS METALSFINANCIAL FLOWSFINANCIAL SERVICESFINANCIAL TRANSFERSFORESTRYFOSSIL FUELSFUELFUEL SUBSTITUTIONGASGCMGENERAL EQUILIBRIUM MODELGHGGHGSGLOBAL CARBON TAXGLOBAL CLIMATE CHANGEGLOBAL EMISSIONGLOBAL EMISSIONSGLOBAL WARMINGGREEN TECHNOLOGIESGREENHOUSEGREENHOUSE GASGREENHOUSE GASESHYDROFLUOROCARBONSHYPOTHETICAL BASELINEIMPORTSINCOMEINSURANCEINTERNATIONAL EMISSIONSINTERNATIONAL OFFSETINVESTMENT DECISIONSIPCCIRONLEVEL OF EMISSIONSLEVELS OF EMISSIONSLUMP SUMMARGINAL ABATEMENTMETHANEMETHANE EMISSIONSMITIGATION ACTIONSMONETARY FUNDN2ONATURAL GASNEGATIVE IMPACTNITROUS OXIDENUCLEAR POWEROFFSET CREDITSOIL EQUIVALENTOIL EXPORTINGOIL PRICEOILSOUTPUT DECLINESPAPER PRODUCTSPER CAPITA INCOMESPLANT GROWTHPLASTICSPOLICY IMPLICATIONSPOLICY MAKERSPOWER GENERATIONPOWER PLANTSPOWER SECTORPPPRICE EFFECTQUANTITATIVE ANALYSISRADIATIVE FORCINGREDUCTION IN EMISSIONSREFINED OILRELATIVE PRICERENEWABLE SOURCESRENEWABLE TECHNOLOGIESREVENUE RECYCLINGSHADOW PRICESUGAR CANETAX REVENUESTEMPERATURETEMPERATURE CHANGETOTAL EMISSIONSTRADABLE EMISSIONSTRADABLE PERMITSTRADE RESPONSESTRADING PARTNERSWASTEWELFARE CONSEQUENCESWELFARE LOSSWELFARE LOSSESWINDWOOD PRODUCTSWORLD EMISSIONSWorld Bank10.1596/1813-9450-5121