GREEN: A GLOBAL MODEL FOR QUANTIFYING THE COSTS OF POLICIES TO CURB CO2 EMISSIONS

Abstract

By modelling the decisions of households and firms, applied general equilibrium (AGE) models are able to capture the economic mechanisms that link, in each period of time, the available resource base to man-made emissions of CO2. The OECD Economics Department has developed a global dynamic AGE model with the objective of quantifying the economic effects of policies aimed at reducing emissions of CO2 in the atmosphere. The project is called the GeneRal Equilibrium ENvironmental model, hereafter referred to as GREEN. This paper provides a non-technical overview of the GREEN model specification, parameterisation and calibration. As such, it is a complement to the other papers on GREEN in this volume that report the results of various policy-relevant simulations with the model. (A) For the covering abstract see IRRD 866201.