Figures 4-6 show the effect of the tax in more detail on aggregated emissions in Europe, North America and Japan, using the endogenous technical change model. In each case emissions continue to rise-a tax of this size alone cannot stabilize or reduce emissions in the long run. The abatement relative to the base case is greatest in North America, followed by Europe, and quite small in Japan. The relationship between energy consumption and CO 2 emissions is illustrated by the second line on
each graph, representing the emission per toe of fossil fuel consumed, which depends on the fuel mix. In Europe, there is a significant decline in this ratio, brought about by the increased use of natural gas. In North America and Japan the figure increases, implying substitution away from gas.