How (and Why) Do These Results Differ from Other Projections? Why haven't all projections agreed? Other analyses of the Protocol have different results because of different assumptions for • Economic growth in the United States and the resulting emissions-these alter the base from which reductions must be made • The extent of international trading, joint implementation, and the clean development mechanism • Cost and efficiency of new technologies • How rapidly and to what extent consumers respond to energy price increases-observations of past behavior indicate that consumers may change habits rather slowly • How rapidly capital stock turns over-much of the equipment purchased in 1999 will likely still be in use in 2010 but some analyses do not capture all the transition costs • When actions to reduce emissions begin-EIA assumes that actions begin in 2005 but some analyses assume actions have already begun • How much knowledge consumers have of future events and how early they begin to adjust. EIA assumes that end-use consumers begin to adjust when a price increase occurs, but some analyses assume that adjustments begin well in advance Six other projections of carbon prices and their effects, from various sources, are outlined in Chapter 7 of the full report. Two cases were analyzed: the 1990-7% Case in which the United States is assumed to reduce carbon emissions to 7 percent below 1990 levels for the period 2008-2020 without the benefit of sinks, offsets, international carbon permit trading, or the Clean Development Mechanism (CDM); and a best estimate of the impact on U.S. energy markets if sinks, offsets, and emissions trading among the participating developed nations (Annex I) were allowed, but not global trading or CDM. If the United States is required to achieve stabilization at the 1990-7% levels without Annex I trading and no credit for sinks and offsets, the estimates of carbon prices required in 2010 range from a low of $221 per metric ton to $348 per metric ton, with the vast majority in the $265 to $295 per metric ton range. Actual GDP losses are projected to range from $102 to $437 billion dollars in 2010 (1996 dollars). With Annex I trading and credits for sinks and offsets from other gases, the carbon price ranges between $100 per metric ton to $175 per metric ton and the loss of actual GDP ranges between $56 and $207 billion dollars in 2010. Estimates of internationally purchased carbon credits by the U.S. range from 147 to 288 million metric tons. at Are Some of the Issues in Reducing Availability and cost of technology Consumer acceptance of more advanced or efficient technologies Identification of fiscal and monetary policies to moderate economic impacts Feasibility of the electricity, natural gas, and renewable industries SR/OIAF/98-03 Distribution Category UC-950 Impacts of the Kyoto Protocol October 1998 Energy Information Administration This report was prepared by the Energy Information Administration, the independent statistical and analytical agency within the Department of Energy. The information contained herein should be attributed to the Energy Information Administration and should not be construed as advocating or reflecting any policy position of the Department of Energy or of any other organization. Service Reports are prepared by the Energy Information |