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Kiel Institute for World Economics Kiel Working Papers, Kiel Institute for World Economics

No 922:
Modelling the Economic Impact of Global Warming in a General Equilibrium Framework

Christiane Kurtze and Katrin Springer

Abstract: The issue of global warming has become a major topic in the international environmental debate. Alternative climate policy measures can be evaluated with the help of a simulation model that integrates economic and natural science considerations. A fully integrated assessment of the two-way relationship between the world economy and the climate system requires the incorporation of the repercussions of climate change on economic processes into the analysis. This paper seeks to review the contributions of the economic literature dealing with the modelling of climate change impacts. We look at the structure, assumptions, and results of impact studies to illustrate how climate change impacts can be incorporated into Computable General Equilibrium Models (CGEs). As a point of reference a generic general equilibrium model is established and extended to incorporate climate change impacts on the economy.

Keywords: Climate Change, Impact Modelling, Damage Function, Computable General Equilibrium Model, Integrated Assessment Framework; (follow links to similar papers)

JEL-Codes: D58; D8; Q1; Q2; (follow links to similar papers)

83 pages, April 1999

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