CLIMATE POLICY IN CRISIS AND RECOVERY

Benjamin Jones and Michael Keen
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Benjamin Jones: Formerly Fiscal Affairs Department, International Monetary Fund, Washington DC 20431, USA

Journal of International Commerce, Economics and Policy (JICEP), 2011, vol. 02, issue 01, 103-119

Abstract: This paper focuses on the implications of the economic crisis and recession of 2008–2009 for climate change and related policy responses. Stressing that even prolonged output losses make very little difference to appropriate emissions reduction objectives, the paper argues that a cautious shift towards a more aggressive path of carbon pricing need not impede recovery and could make a valuable contribution to addressing looming fiscal challenges. Well-designed and monitored "green" stimulus measures can help sustain aggregate demand during the downturn, while increased climate-related public spending will likely be needed into the longer-term. However, it is critical to avoid undue reliance on spending rather than tax measures, particularly as the recovery strengthens.

Keywords: Climate change; fiscal policy; carbon taxation; emissions trading; fiscal stimulus; Q43; Q50; H23; E62 (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1142/S1793993311000245

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