A MODEL INTERCOMPARISON OF THE WELFARE EFFECTS OF REGIONAL COALITIONS FOR AMBITIOUS CLIMATE MITIGATION TARGETS

Gã–kã‡e Akin-Olã‡um, Madanmohan Ghosh (), Elisabeth Gilmore, Peter Johnston, Mohammad M. Khabbazan, Ruben Lubowski, Margaret McCallister, Nick Macaluso, Sonja Peterson, Malte Winkler, Maosheng Duan, Mengyu Li, Ramiro Parrado and Sebastian Rausch
Additional contact information
Gã–kã‡e Akin-Olã‡um: Environmental Defense Fund, 18 Tremont Street, Boston, MA 02108, USA
Elisabeth Gilmore: ��Environment and Climate Change Canada, 200 Boulevard Sacré-Coeur, Gatineau, QC J8X 4C6, Canada§Department of Civil and Environmental Engineering, Carleton University, 3432 Mackenzie, 1125 Colonel By Drive, Ottawa, ON K1S 5B6, Canada
Peter Johnston: ��Environment and Climate Change Canada, 200 Boulevard Sacré-Coeur, Gatineau, QC J8X 4C6, Canada
Mohammad M. Khabbazan: �Workgroup for Economic and Infrastructure Policy (WIP), Berlin University of Technology (TU Berlin), Strasse Des 17. Juni 135, 10623 Berlin, Germany∥DIW Berlin, Department of Energy, Transport, and Environment, Mohrenstrasse 58, 10117 Berlin, Germany**Research Unit Sustainability and Global Change Center for Earth System Research and Sustainability, University of Hamburg, Grindelberg 5, 20144 Hamburg, Germany
Ruben Lubowski: Environmental Defense Fund, 18 Tremont Street, Boston, MA 02108, USA††Lombard Odier Asset Management, 452 5th Avenue, 25th Floor, New York, NY 10018, USA‡‡Columbia University, 420 West 118th Street, New York, NY 10027, USA
Margaret McCallister: Environmental Defense Fund, 18 Tremont Street, Boston, MA 02108, USA
Nick Macaluso: ��Environment and Climate Change Canada, 200 Boulevard Sacré-Coeur, Gatineau, QC J8X 4C6, Canada
Sonja Peterson: �§Kiel Institute for the World Economy (IfW), Kiellinie 66, D-24105 Kiel, Germany
Maosheng Duan: �¶Perspectives Climate Group GmbH, Rübekamp 33, 25421 Pinneberg, Germany
Mengyu Li: ��∥Institute of Energy, Environment and Economy, Room C300, Energy Science Building Tsinghua University, Beijing, P. R. China
Ramiro Parrado: **RFF-CMCC European Institute on Economics and the Environment Centro Euro-Mediterraneo Sui Cambiamenti Climatici, Via della Libertà , 12 - 30175 Venezia (VE), Italy

Climate Change Economics (CCE), 2023, vol. 14, issue 02, 1-28

Abstract: This paper presents the overall and distributional welfare effects of alternative multi-regional emissions trading coalitions relative to unilateral action. It focusses on meeting Paris Agreement pledges and more emissions reduction targets consistent with 2∘C and 1.5∘C temperature pathways in 2030. The results from seven computable general equilibrium (CGE) models are compared. Across all models, welfare gains are highest with a global market and increase with the stringency of targets. All regional coalitions also show overall welfare gains, although lower gains than the global market. The models show more variability in the gains by a participant. Depending on the model, participants may benefit more from some regional arrangements than from a global market or face modest losses compared to the domestic reductions alone, due to interactions between carbon targets and fossil fuel markets. The scenario with a joint China–European Union emissions trading system in all sectors is consistently favorable for participants and provides the highest economic gains per unit of emissions abated.

Keywords: Climate mitigation; regional cooperation; emissions trading; welfare (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:ccexxx:v:14:y:2023:i:02:n:s2010007823500094

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DOI: 10.1142/S2010007823500094

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