FLAWS IN ‘TOP-DOWN’ ECONOMIC MODELS OF GREENHOUSE RESPONSE
zCalculate costs but ignore benefits.
zAssume, counter to observation, that there are no cost-effective energy efficiency measures to implement. zAssume baseline, business-as-usual scenarios with high growth in emissions zAttempt to describe energy technologies in a crude manner by means of just 2 constant numbers.
zUse GDP inappropriately as a measure of welfare.
zOften fail to perform sensitivity analyses to controversial assumptions, e.g. how a carbon tax is spent.
• Benefits include better health, more jobs (if implemented well),less economic risk (in formerly coal dependent areas, and nationally).

• Huge body of case studies contradicts, including Fed. Govt’s greenhouse Challenge program.

• E.g. Studies of the cost of GH response in Australia & China.

• Parameters are (1) Autonomous End-Use Energy-Intensity Improvement, usually assumed due to new technology and to be 0.5-1.0% p.a.
(2) elasticities, e.g. change in energy demand resulting from change in its price.
China since 1997 makes a nonsense of both parameters.
• GDP etc increase when we spend on sea walls, pesticides, medical & hospital bills, snow-making machines, etc.

• How tax is spent dramatically changes job creation in computer simulations.