The Kyoto Protocol: Economic impacts on annex B economies and key Australian industries

Abstract

The Kyoto Protocol contains provision for emission trading and other flexibility mechanisms (such as the clean development mechanism) that have the potential to minimise the economic costs of achieving the protocol commitments. The results presented in this paper demonstrate that the flexibility to carry out emission abatement in low cost regions, as conferred by emission trading, leads to a significant reduction in the economic cost of implementing the Kyoto protocol for Annex B regions. This underlines the importance of incorporating as much flexibility as possible in the implementation of the Kyoto Protocol. The other flexibility mechanisms - joint implementation and the clean development..