Gerhard Wagenhals

Concepts and Methods for the Study

In this chapter we seek to lay the conceptual foundations for our study. The structure of the rest of this chapter is as follows.

Copper Market Models

This chapter briefly surveys existing econometric and other quantitative copper market models. The final section describes the main features of a new econometric copper market model, which the rest of the book will discuss in detail.

Trade and Prices

After summarizing some basic information about the general pattern of trade flow in the world copper industry, the first section of this chapter describes how the world copper industry falls into three more or less self-sufficient regions, a fact reflected in the structure of Part II’s econometric model. Section 2 reports about the organization of the most important copper exporting developing countries and their efforts to influence prices, while the last section actually explains how copper prices are formed.

Input-Output Methods

The principal analytical technique we use in the rest of this study is input-output analysis. Many readers will already be familiar with this technique, and for these this chapter need serve only as a concise reference. However, other readers may not know of this technique (or have forgotten what they once knew!). For these readers this chapter is designed as an introduction/refresher in input-output methods.

Policy Conclusions for Reducing CO2 Emissions

In this final chapter we summarise our major conclusions in Section 14.2. We then offer, in Section 14.3, a brief commentary on how these conclusions can inform policy regarding reducing CO2 emission rates by Germany and the UK, and the EC as a whole. Finally, in Section 14.4 we stress again the need for the will in confronting the global greenhouse effect.

Decomposing the Rate of Change of CO2 Emissions

In this chapter we seek to understand more fully the data presented in Chapter 3. We do this by first deriving a technique of decomposing the proportional rate of change of CO2 emission into three main factors. We then apply this technique to our data for the World, the USA and the EC.

Appendix: Decomposition with Differencing

In this Appendix we derive the results on the decomposition of rates of change of a variable which depends on other variables. This is a generalisation of the method of logarithmic differentiation used in Chapter 4. We use this technique of differencing extensively in Chapter 5, and Sections III and IV.

Appendix: Decomposition of Changes in CO2 Emissions

In this Appendix are gathered the tables representing the decompositions of changes in CO2 emissions by Germany and the UK, between successively dated input-output tables. These are as follows: Germany 1978–80 UK 1968–74 1980–82 1974–79 1982–84 1979–84 1984–86 1986–88 All figures presented in the tables are annualised proportional rates of change.

A ‘Minimum Disruption’ Approach to Scenario Analysis

In the previous chapter we presented a number of scenarios of economic restructuring, with the assessment of the corresponding reductions in CO2 emissions. However, although this approach is well-established, it faces two problems.

A Framework for Modelling Production

In his presidential address to the American Economic Association, Wassily Leontief [1971:6] remarked: “An unreasonably high proportion of material and intellectual resources devoted to statistical work is now spent not on the collection of primary information but on frustrating and wasteful struggle with incongruous definitions and irreconcilable classifications”.