|Title||How High are the Costs of Kyoto for the US Economy?|
|Publication Type||Tyndall Working Paper|
|Series||Tyndall Centre Working Papers|
|Tyndall Consortium Institution|| |
|Secondary Title||Tyndall Centre Working Paper 4|
|Authors||Barker, T., and P. Ekins|
|Year of Publication||2001|
Estimates of the costs of implementing the Kyoto protocol are uncertain and most are based on assumptions that necessarily imply high costs. A selection of alternative (often more realistic) assumptions gives estimates that suggest net benefits rather than costs. One high-cost estimate is from the US Energy Information Administration but it is based on a rapid short-term adjustment to Kyoto-type targets and the model does not include the flexibility mechanisms. Another high-cost (but long-term) estimate is from the Oxford model and suggests a 4% cost of US GDP by 2020 to achieve Kyoto targets without the flexible mechanisms. It is shown that this estimate is based on a wrong interpretation of the literature, a confusion of short-term with long-run costs, and a selection of worst-case assumptions and parameters. Provided policies are expected, gradual and well-designed, the costs for the US of Kyoto are likely to be insignificant.