Solving an equilibrium model for trade of CO2 emission permits

In this paper we investigate the trade of CO2 emission permits in the framework of a competitive economic equilibrium. For this purpose we integrate already existing regional energy-economy models (Markal-Macro) into a single multi-regional trade model. Based on two possible integration schemes we discuss two solution concepts: the first is based on pseudomonotonicity of the excess map whereas the second is a fixed point approach due to Negishi. In the latter case the overall optimization problem is decomposed. For both algorithms the regional subproblems were distributed on different computers and solved in parallel. We conclude by presenting numerical results of a model with full data sets for Switzerland, Sweden and the Netherlands. (C) 1997 Elsevier Science B.V.