Green Growth and Sustainability: Analysing Trade-Offs in Climate Change Policy Options

A. Antimiani, Valeria Costantini, Anil Markandya, C. Martini, Alessandro Palma and M.C. Tommasino

No 332550, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: In this paper we investigate the trade-offs between economic growth and low carbon targets for both developing and developed countries for the period to 2035. The issues examined include the assessment of abatement costs related to two policy options for being on track to meet the 450 PPM target: (a) national targets without international trade in carbon permits and (b) a global market in permits. Policy options are evaluated with an original version of the dynamic CGE model GDynE. The model focuses on bilateral trade flows and links between economies and sectors that capture the realistic economy-wide nature of a globalized world. Abatement costs appear to be strongly detrimental to economic growth for both country groups, but the developing part of the world results particularly affected by active climate policies. We investigate options for reducing these costs that are broadly consistent with a green growth strategy to support low carbon development. We show that a Green Climate Fund financed through a levy on carbon taxation can benefit all parties. Finally, potential larger benefits are associated with the investment of the Green Climate Fund to foster energy efficiency in developing countries.

Keywords: Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 50
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332550

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