A Comparison of Computable General Equilibrium Models for Analyzing Climate Change Policies

The current unsustainable trends in greenhouse gas emissions as projected in the Second Assessment Report of the Intergovernmental Panel on Climate Change have raised considerable environmental concern among the developed countries. This concern has led to an agreement among these countries on goals and measures to reduce emissions, currently written down in the Kyoto Protocol. The realization of goals and policies proposed in this protocol will likely have major impacts on the world economy. The estimation of foreseeable effects of such policy strategies has prompted the need for an adequate modeling of this complex constellation. Hence, during the last decade several models have been developed that provide the possibility to give a quantitative assessment of the impact of climate policies on the economy. This article compares a number of important computable general equilibrium models that have been developed for this purpose in recent years. We compare different characteristics of these models, and consider the applicability of these models to particular policy strategies related to the implementation of climate change policies.