Global climate change issue raises two basic questions: What to do to guarantee the long-term efficiency (or the least collective cost) of international greenhouse gas control policies? Who pays for abatement and adaptation so that equity among countries is promoted and action of all countries is guaranteed? This paper presents how technical-economic MARKAL and its multi-region advanced version TIMES compute optimal energy and technology decisions under environmental constraint. A Canadian case study points out typical results calculated by MARKAL (e.g. marginal costs, total costs, technology choices, etc.) and it emphasizes critical assumptions influencing computed results, such as optimization assumption, system-effects under local perturbations, end-use elasticities etc. Finally, the paper proposes to use game theory approaches combined to MARKAL/TIMES modeling to calculate transfers among countries that would guarantee that all countries' individual welfare are better off under the international cooperation case compared to the no-cooperation case (Nash equilibrium).
Published December 2001 , 18 pages