IMPLEMENTING THE KYOTO ACCORD IN CANADA
125
estimates represent the average of all provinces. From the above tables, one can see that the average of
the provincial estimates (of the six provinces considered) are close to Canada’s estimates.
1
1
The AAC = TAC/15. The value of GDP used is that of 1998 and refers to 1990 constant prices.
Note that all results in the subsection on Abatement Costs under different Emission Scenarios hold
1
2
under the assumption that the average emission growth rates of the period 1978–98 will prevail under
the BAU scenario.
1
3
(cT+0.5*dT2)
b
b
The total abatement cost function is given by Y = a e
(E t – E t ) where E t refers to emis-
t
1 2 1
sions at time t under path 1 while E t refers to emissions at time t under path 2.
2
1
4
Note that we deal only with CO emissions that are generated by fossil fuel burning.
The marginal damage function shows the change in damages resulting from a unit change in emis-
2
1
5
sions.
1
1
1
6
7
8
An analytical illustration of the principal and its efficiency is given by Field (1997).
For simplicity, we assume that the same tax t is imposed on Alberta.
A
MacKinnon values for the Augmented Dickey Fuller tests are given in the Quantitative Micro
Software Eviews, Version 3.1.
1
9The appropriate lag length is determined using the Akaike information criterion (minimum Akaike
value).
2
0The critical values for the test are given by Gregory and Hansen (1996).
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