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Climate clubs and the macro-economic benefits of international cooperation on climate policy

Leonidas Paroussos (), Antoine Mandel (), Kostas Fragkiadakis, Panagiotis Fragkos, Jochen Hinkel and Zoi Vrontisi
Additional contact information
Kostas Fragkiadakis: E3MLab - Institute of Communication and Computer Systems - NTUA - National Technical University of Athens [Athens]
Panagiotis Fragkos: E3MLab - Institute of Communication and Computer Systems - NTUA - National Technical University of Athens [Athens]
Jochen Hinkel: Global Climate Forum e.V.
Zoi Vrontisi: E3MLab - Institute of Communication and Computer Systems - NTUA - National Technical University of Athens [Athens]

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Abstract: The Paris agreement has provided a new framework for climate policy. Complementary forms of international collaboration, such as climate clubs, are probably necessary to foster and mainstream the process of gradual and voluntary increase in nationally determined contributions. We provide a quantitative macro-economic assessment of the costs and benefits that would be associated with different climate club architectures. We find that the key benefits that could structure the club are enhanced technological diffusion and the provision of low-cost climate finance, which reduce investment costs and also enables developing countries to take full advantage of technological diffusion. Although they face the highest absolute mitigation cost, China and India are the largest relative winners from club participation because the burden faced by these countries to finance their energy transition can be massively reduced following their participation in the club.

Keywords: Climate change; Economics; Government (search for similar items in EconPapers)
Date: 2019-07
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-02334592
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Published in Nature Climate Change, Nature Publishing Group, 2019, 9 (7), pp.542-546. ⟨10.1038/s41558-019-0501-1⟩

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Working Paper: Climate clubs and the macro-economic benefits of international cooperation on climate policy (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-02334592

DOI: 10.1038/s41558-019-0501-1

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