Abstract:

Beginning in 1870s with the industrialization process humanity has been faced with the problem of global warming and climate changes by the intensive use of fossil fuels. This problem affects all countries in the world regardless of the development level. The aim of this study is to analyse the economic costs of emission trade which is one of the methods implemented to control the carbon dioxide emission that is the main reason of global warming that came to order with Kyoto Protocol in 2008 in terms of Turkish economy and make recommendations for the future economy policies that have to be implemented with the help of general equilibrium analysis. Firstly in the study the most recently published 2002 Input-Output table with 59 sectors categorized by Turkish Statistics Institution (TSI) was consolidated by basing upon the sectors with higher emission intensity and it was reduced to 10 sectors. General equilibrium analysis results were calculated under the different emission quotas and the scenarios of international carbon price changes. As a result of general equilibrium analysis, it was found the evidence that the welfare loss of the practice of emission trade on Gross Domestic Product (GDP) was lower than the carbon tax

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