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The portfolio of economic policies needed to fight climate change

Olivier Blanchard, Christian Gollier () and Jean Tirole

No WP22-18, Working Paper Series from Peterson Institute for International Economics

Abstract: Climate change poses an existential threat. The authors argue that carbon pricing and green research and development (R&D) support are good economics, but their implementation can be improved. Even if carbon prices are generalized and given more substance, green R&D is still likely to be smaller than needed. Much more money must be spent on it than is now the case, and this money must be properly allocated in order to have an impact. Moreover, done well, other policies, such as standards, bans, and targeted subsidies, can be good economics. But they have often been incoherent and their implementation is delicate. The authors also argue that domestic and international compensation is key to the acceptability of efficient policies. Finally, although a country's emissions will not materially alter the course of climate change, individual countries can still show the way ahead: They can develop technologies that can be used by other, poorer, countries. They can provide leadership/momentum on global agreements and on the need to fund climate change policies in developing economies.

Keywords: Climate change; carbon price; green R&D; carbon border adjustment; climate finance (search for similar items in EconPapers)
JEL-codes: D61 F18 H23 Q37 Q54 (search for similar items in EconPapers)
Date: 2022-11
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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Citations: View citations in EconPapers (1)

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