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Published in:
2015 | OriginalPaper | Chapter
7. Reference and Policy Scenarios of CGE Model
Authors : Barun Deb Pal, Vijay P. Ojha, Sanjib Pohit, Joyashree Roy
Published in: GHG Emissions and Economic Growth
Publisher: Springer India
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Abstract
Typically, a computable general equilibrium (CGE) model is employed to develop, first and foremost, what could be called the “no-policy” or “benchmark” scenario, but is conventionally alluded to as the baseline or business-as-usual (BAU) scenario, or simply reference scenario. Subsequently, it is usually run to generate counterfactual policy scenarios, which are then compared with respect to the reference scenario to derive policy lessons. In accordance with this convention in CGE analysis, we have developed a reference scenario, without any market-based instrument for climate change mitigation, and two carbon tax scenarios in which producers are fiscally incentivised to switch to cleaner sources of energy.