Preliminary Draft, 2/3/98

Summary of Trading Bloc Scenarios, U.S. Sinks = 50 MMTCE, AEEI = 1.0

Summary of Trading Bloc Scenarios, U.S. Sinks = 50 MMTCE, AEEI = 1.25

All scenarios assume that the U.S. achieves 8.3% of its domestic reductions through sinks
(50 MMTCE), while no other countries reduce through sinks.

20% JI scenarios assume that joint implementation is equal to 20% of the gains from
ideal worldwide trade.

The U.S. marginal abatement curve is such that the slope increases after a certain price
(that price varies by AEEI) because there are very few inexpensive abatement
opportunities among non-CO2 gases above $20 (actually, there is a step in the non-CO2
supply curve, where the next large gain in emissions reductions is at $50/ton). Thus, the
percent abated per $/ton is higher at lower permit prices than it is at higher permit prices.