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regions studied. In this respect, they differ from this report,
which examines the possibilities for greenhouse gas reductions from
individual technologies and attempts to make the estimates mutually
consistent by manual calculations.
A second important difference between the Nordhaus (1991) survey
and this report is that the survey estimates the cost function for
reducing greenhouse gas emissions beginning from the point at which
all the "negative-cost" options have been employed. In most
economic models, the market equilibrium is this point; in one
model, where market failures are allowed, the results have been
recast so that the cost estimates begin from the point at which
market failures have been allowed for. It is important to note,
then, that the negative-cost part of the cost function, should it
exist, is excluded from this survey.
The models represented in the survey encompass a wide variety of
approaches to energy sector modeling. The studies surveyed
(Nordhaus, 1991) were the following, listed roughly in order of
their chronological development:
1. A series of mathematical-programming models, developed
by Nordhaus and his associates, that use a technological
specification for supply and econometric estimates for demand.
2. A purely behavioral or econometric model developed by
Nordhaus and Yohe for the 1983 NAS study, Changing Climate,
with a simplification for estimates of the impact of different
3. A series of models developed by Edmonds and Reilly,
which are a mixture of technological data on the supply side and
behavioral assumptions on the demand side.
4. A series of studies by Manne and Richels, which have
much the same analytical structure as study 1 but are generally
smaller and provide less detail on the demand side.
5. Estimates by Bodlund and associates for Sweden, using
largely a mathematical optimization model with many alternative
6. Studies by Kram and others using a linear programming
model of the Netherlands economy with a structure similar to that
in study 5
7. A six-region computable general equilibrium model
developed by Whalley and Wigle that includes the energy and
nonenergy sectors. The energy sector is purely behavioral and is
not econometrically estimated.
8. A series of optimization models developed by the
European Community that include both supply and end-use
technologies for five European countries. These models allow for
market failures in the energy-using sectors.
9. An extension of the Jorgenson approach by Jorgenson and
Wilcoxen to include CO2 emissions.
The estimates are purely econometric but are based on extensive
data and estimation.