North-South convergence and the allocation of CO2 emissions

Humberto Llavador, John Roemer and Joaquim Silvestre

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We postulate a two-region world, comprised of North (calibrated after the US) and South (calibrated after China). Our optimization results show the compatibility of the following three desiderata: (1) Global CO2 emissions follow a conservative path that leads to the stabilization of concentrations at 450 ppm. (2) North and South converge to a path of sustained growth at 1% per year (28.2% per generation) in 2075. (3) During the transition to the steady state, North also grows at 1% per year while South’s rates of growth are markedly higher. The transition paths require a drastic reduction of the share of emissions allocated to North, large investments in knowledge, both in North and South, as well as very large investments in education in South. Surprisingly, in order to sustain North’s utility growth rate, some output must be transferred from South to North during the transition. Although undoubtedly subject to many caveats, our results support a degree of optimism by providing prima facie evidence of the possibility of tackling climate change in a way that is fair both across generations and across regions while allowing for positive rates of human development.

Keywords: Convergence; CO2 emissions; North-South; climate change; sustainability; growth. (search for similar items in EconPapers)
JEL-codes: D62 D63 D90 O40 Q54 Q55 Q56 Q58 (search for similar items in EconPapers)
Date: 2010-08
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: North-South Convergence and the Allocation of CO2 Emissions (2019)
Working Paper: North-South Convergence and the Allocation of CO2 Emissions (2015)
Working Paper: North-South Convergence and the Allocation of CO2 Emissions (2013)
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