Options for International Financing of Climate Change Mitigation in Developing Countries

Mark Hayden, Paul J.J. Veenendaal and Ziga Zarnic

No 406, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper provides a model-based analysis of the potential macro-economic impacts of different options for international financing of climate change mitigation in developing countries. The model used is the multi-region and multi-sector climate change version of the WorldScan model. Following the outcome of the UNFCCC conference in Copenhagen, it makes no specific assumptions about the future international climate regime. The analysis shows that the environmental prospects systematically improve in a transition from the Clean Development Mechanism projects towards a global carbon market, while the opposite is foreseen for the economic costs. The more of a carbon market we have when moving from the project-based CDM to sectoral crediting mechanisms and internationally linked cap-and-trade, the more finance the carbon market will channel to developing countries.

Keywords: european; union; eu; annex; I; non-annex; I; climate; conference; in; Copenhagen; climate; change; mitigation; clean; development; mechanism; emission; trading; system; the; US; brazil; china; india; own; participation; of; developing; countries; sectoral; crediting; mechanisms; hayden; Veenendaal; Zarnic (search for similar items in EconPapers)
JEL-codes: D58 Q40 Q50 Q51 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-03
New Economics Papers: this item is included in nep-cmp, nep-cwa, nep-ene, nep-env and nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0406

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