Macro-quantitative Analysis of Kyoto Mechanism

Ryoichi Komiyama
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The Kyoto Protocol, as adopted at the Third Conference of the Parties to the U.N. Framework Convention on Climate Change (COP3), has introduced the Kyoto Mechanism (including the Emissions Trading, Joint Implementation, and Clean Development Mechanism systems) to promote the efficient achievement of greenhouse gas emission reduction targets. Calls have grown for global efforts to enhance the Kyoto Mechanism. This study represents a quantitative analysis of the Kyoto Mechanism, taking advantage of a world economy and energy model under a hypothetical situation where no problem exists with the actual implementation of the Kyoto Mechanism. Specifically, the author has estimated global CO2 emissions, energy investment and the marginal cost of CO2 emission reduction based on shadow price concept.