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IMPACT AND DISTRIBUTION OF CLIMATIC DAMAGES: A METHODOLOGICAL PROPOSAL WITH A DYNAMIC CGE MODEL APPLIED TO GLOBAL CLIMATE NEGOTIATIONS

Valeria Costantini, Giorgia Sforna, Anil Markandya and Elena Paglialunga

No 226, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: The UNFCCC Parties Paris Agreement entered into force on 4 November 2016 represents a step forward in involving all countries in mitigation actions, even though still based on a voluntary approach and lacking the involvement of some major polluting countries. The underinvestment in mitigation actions depends on market and policy failures and the absence of market signals internalizing the economic losses due to climatic damage contributes to underestimating potential benefits from global action. We highlight how crucial is the vulnerability of a country to climate change in defining the threat and action strategies. A dynamic climate-economy CGE model is developed by including a monetary evaluation of regional damages associated with climate change. By considering alternative damage estimations, results show that internalizing climatic costs changes the bargaining position of countries in climate negotiations. Consequently, damage costs should be given greater importance when defining the implementation of a global climate agreement.

Keywords: Climate change damage costs; Climate negotiations; Burden sharing; Mitigation costs; GTAP; CGE. (search for similar items in EconPapers)
JEL-codes: C68 H23 O44 Q54 (search for similar items in EconPapers)
Pages: 34
Date: 2017-10
New Economics Papers: this item is included in nep-agr, nep-cmp, nep-ene and nep-env
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Journal Article: Impact and distribution of climatic damages: a methodological proposal with a dynamic CGE model applied to global climate negotiations (2018) Downloads
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