Economics of Climate Change: Introducing the Basic Climate Economic (BCE) Model

Lucas Bretschger and Christos Karydas ()
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Christos Karydas: ETH Zurich, Switzerland

No 18/296, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: The paper develops the Basic Climate Economic (BCE) model featuring the core elements of climate economics and climate policy. The BCE model incorpo- rates fossil stock depletion, pollution stock accumulation, endogenous growth, and climate-induced capital depreciation. We first use graphical analysis to show the effects of climate change and climate policy on economic growth. In- tuition for the different model mechanisms, the functional forms, and the effects of different climate policies is provided. We then show the model equations in mathematical terms to derive closed-form solutions and to run model simula- tions relating to the graphical part. Finally, we compare our setup to other models of climate economics.

Keywords: Climate change; endogenous growth; climate policy; resource use; stock pollution (search for similar items in EconPapers)
JEL-codes: O41 O47 Q43 Q56 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2018-09
New Economics Papers: this item is included in nep-ene, nep-env, nep-gro and nep-hme
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Economics of climate change: introducing the Basic Climate Economic (BCE) model (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:18-296

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