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[ D] If new policy measures or the negotiation of new and tougher reduction targets under the Kyoto Protocol are considered, not only will allocative effects matter, but the distributional effects will also play a major role. A new environmental instrument might be cost-efficient, but if certain stakeholders will bear an unproportional cost burden, the realisation of such a measure will be problematic due to social or political acceptability reasons. The same holds for the international level. In order to quantify these effects, we use macro-economic models.
