Abstract for: Modeling Of The Interactions Between Sectoral Co2 Emissions And Energy Efficieny Under Emission Restriction Policies

The purpose of this study is to understand the dynamic effects of carbon dioxide (CO2) emission restrictions and energy price policies on two highly energy intensive sectors of industry; iron&steel industry and cement industry over a 12 year period. Model is designed so that critical decisions such as growth and efficiency investments are based upon profit and extra costs incurred due to CO2 emissions. The profit margin, CO2 cost over revenue and Energy Cost Share in Total Annual Production are important key variables in the model. This study, giving attention to the economic and energy-emission policy aspects, aims to analyze the causal relationships and the feedback structures among industry’s production capacity, investments on new and energy efficient technologies, financial burden, and CO2 emissions.