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Discussion Paper

Requiem for Kyoto: An Economic Analysis of the Kyoto Protocol

This paper uses the newly developed RICE-98 model to analyze the economics of the Kyoto Protocol. It analyzes versions of the Kyoto Protocol that have different approaches to trading emissions rights and compares these with efficient approaches. The major conclusions are: (a) the global cost of the Kyoto Protocol is $716 billion in present value, (b) the United States bears almost two-thirds of the global cost;and (c) the benefit-cost ratio of the Kyoto Protocol is 1/7.