Development of AIM (Asian-Pacific Integrated Model) for coping with global warming

The need to respond to climate changes is now a matter of common recognition throughout the world. After several years of negotiations, agreement was reached on the Kyoto Protocol in 1997 in Japan. The Protocol is regarded as an important step toward meeting the objective of stabilizing greenhouse gas concentrations in the atmosphere. The paper discusses the costs of implementing the Protocol under a variety of assumptions. The AIM model is used to simulate post-Kyoto scenarios. It is found that it is possible to decrease CO₂ emissions without scaling back productive activity or reducing living standards in Japan. However, if one relies on the market mechanism alone, this will not occur. Our analysis clearly shows that it is necessary to introduce new policy measures such as a carbon tax and increased subsidies for introducing energy-saving technologies