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Cost-effeciveness is one important principle to minimize the economic burden of emission control strategies while safeguarding environmental integrity. Cost-effectiveness analysis is a form of economic analysis that compares the relative expenditure (costs) and outcomes (effects) of two or more courses of action. Cost-effectiveness analysis is often used where a full cost-benefit analysis is inappropriate e.g. the problem is to determine how best to comply with a legal requirement.
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The optimization approach |
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IIASA develops tools for identifying cost-effective pollution control strategies, based upon the recently developed estimates of national emission control costs for air pollutants and greenhouse gases of the RAINS and GAINS models. Its optimization approaches enable search for sets of measures that simultaneously meet environmental targets on air quality and greenhouse gas reductions at least costs. The analysis takes full account of the interactions between different control measures and pollutants, and thus allows highlighting synergies and trade-offs of particular strategies.
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The role of economic instruments |
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In a further step, such formal optimization approaches are extended to simulate the role of economic instruments, such as emission trading schemes, joint implementation and the clean development mechanism, i.e., of instruments which aim at equalizing marginal costs of pollution control across countries. With its bottom-up analysis of emission control costs and potentials, the GAINS approach quantifies cost saving potentials from such economic instruments at a country level both for industrialized and developing countries. It further enables identifying constraints on trading potentials imposed by site-specific environmental concerns (e.g., about local air quality). Up to now such constraints have been ignored in most of the analyses of flexible mechanisms, although in practice they could substantially limit the potential for cost-effective transactions. |
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About the program