A Comparative Cost Analysis of Two International Carbon Dioxide Emission Reduction Strategies

Abstract

The average world temperature in 1998 was 58.946° Fahrenheit, the highest temperature ever recorded on Earth. Numerous scientists have proposed that this record high in particular and the warming trend over the past 130 years in general was caused by an increase in carbon dioxide emitted through artificial processes. This thesis will outline the most efficient way to undertake an emission reduction program. This thesis will also analyze the costs of two ways in which 157 nations can reduce their emissions of carbon dioxide: allowing the trade of emission permits, and not allowing trade. It is hypothesized that the trade of permits will cost less than a program that does not allow trade. There is a large cost savings potential with the trade of permits, but whether or not permits are traded, reducing carbon dioxide emissions is relatively cheap. It is also sumised that costs of reducing emissions will decrease as more countries are included in a trading program.