Introduction: special issue on the economics of climate change and sustainability (Part A) (original) (raw)
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Introduction: special issue on the economics of climate change and sustainability (Part B)
Environment and Development Economics, 2020
Climate change is considered to be one of the most significant and complex challenges facing the world in the twenty-first century. As such, it is essential to increase the knowledge base regarding climate change and how best to address its impacts through efficient policies. This special issue, which is divided into two parts-published in the previous and current issues of Environment and Development Economics-is a selection of papers related to 'The Economics of Climate Change and Sustainability', the topic of an international workshop organized by the Economics Department of the University of Bologna in April 2018. The papers in this special issue cover a wide range of climate-change-related topics, including endogenous growth and overlapping generation models; climate-related financing and green bonds; demography; location decisions and technology diffusion; quantitative relationships and experimental approaches. They aim at providing new insights into the economics of climate change and help to identify new directions for future research.
Introduction: Special Issue on the Economics of Climate Change and Sustainability
Environmental and Resource Economics
The recent report from the IPCC (2018) on the urgency of action to ensure that global warming is limited to 1.5°C above pre-industrial levels underlines the critical risks of catastrophic climate change impacts now facing the world. Without rapid reductions in anthropogenic emissions of greenhouse gases, serious detrimental impacts on the global economy and the natural environment appear unavoidable. Understanding climate change along with its economic dimension is a complex issue that involves climate science, economics and their interactions. To contribute to the ongoing scientific discussion regarding understanding the economic impacts of climate change and the design of efficient climate policies, in April 2017 the Economics Department of the University of Bologna-Rimini Campus organized an international workshop on "The Economics of Climate Change and Sustainability". The intention is to organize this workshop on an annual basis and in this way to provide a forum for scientists, both senior and junior, to present their research and to engage in exchange of ideas. This special issue consists of a selection of eleven papers presented at this first workshop. The first group of contributions included in this Special Issue consists of four papers discussing issues directly related to climate change policies and in particular to carbon taxes and the social cost of carbon. The paper "As Bad as it Gets: How Climate Damage Functions Affect Growth and the Social Cost of Carbon", by Bretschger and Pattakou (2019), analyzes the effects of varying climate impacts on the social cost of carbon and economic growth by using polynomial damage functions in a model of an endogenously growing two-sector economy. The results suggest a big effect on the social cost of carbon and a significant impact on the growth rate when the selected damage function is quadratic. It is also shown that high marginal climate damages under the quadratic specification require stringent climate policies but do not preclude positive economic growth when these policies are efficient.
Australian Journal of Agricultural and Resource Economics, 2015
This is a text on climate change and its economics. It is written in a brisk, lecture note format with much material tersely presented. It contains exercises, reading lists and utilises a supplementary website which contains lecture notes, quizzes, lecture slides and supporting databases. As someone who teaches classes on climate economics, I found this useful. Particularly useful were those early parts of this book that involve describing the science and in establishing a conceptual policy setting. Early chapters summarise the physical science basis of climate science with an emphasis on the physical uncertainties, the difficulties of projecting climate trends and of devising future emissions scenarios. Then, abatement costs are discussed. They are seen as low provided adjustments are given enough time to be implemented. Carbon taxes work best if they are implemented broadly and double-dividend benefits are utilised. The choice of market-based policy instrumentstaxes, subsidies, tradable permitsfor emission reduction is then analysed in both static and dynamic contexts. The dynamic efficiency conditions are presented tersely. It is assumed that the carbon price equals a costate variable from an optimal control task reflecting the shadow price of emissions. With respect to choosing between taxes and tradable permits under uncertainty, the standard Weitzman result is provided. Since costs depend on stocks of emissions (not on flows), using a tax instrument will outperform tradable permits. Tol rejects the realist political argument that 'grandfathering' permits admit greater political feasibility than subjecting emitters to taxes. He also discusses problems of making permits internationally tradable and discusses the EU scheme and the Clean Development Mechanism (CDM) mechanism. Technological innovation in the energy sector is best driven by a credible abatement policy. These are all sensible views and well argued. Approaches to valuation of various climate impacts are provided, along with a useful discussion of willingness-to-pay and willingness-to-accept compensation for climate changes. This binds the way climate policy discussions are formulated and impacts on the way climate impacts are valued. Chapter 6, which looks at empirical estimates of climate impacts, is more problematic. This is the start of a sequence of chapters that downplay the need for a stringent activist climate policy. The claim is that moderate climate change is most likely which will have small aggregate impacts mainly in poor countries where limited adaptation capacity creates extra costs. Hence, it is argued, economic development is the best means of addressing climate issues since it best improves this capacity. The probabilities of severe climate events
Economics of Climate Change and Policy Responses for Stabilization, Mitigation and Adaptation
2009
LIMATE change presents a unique challenge for economics: it is the greatest and widest-ranging market failure ever seen. The economic analysis must therefore be global, deal with long time horizons, have the economics of risk and uncertainty at centre stage, and examine the possibility of major, non-marginal change. Economics has much to say about assessing and managing the risks of climate change, and about how to design national and international policy responses for both the reduction of emissions and adaptation. The present paper draws on ideas and techniques from most of the important areas of economics, including many recent advances.
The Economics of Global Climate Change: A Historical Literature Review
Review of Economics, 2014
We review the literature on the economics of climate change with a focus on the evolution of the literature from some of the early classic papers to the latest contributions. We divide the paper into three main sections: trends in greenhouse gas emissions, mitigation, and adaptation.
Frontiers of Climate Change Economics
Environmental and Resource Economics, 2017
The economics of climate change is an active field of research. The contributions to a Special Issue are put in context of the literature, and it is suggested that second-best issues such as carbon leakage and the Green Paradox need to be complemented with a political economy analysis of why certain instruments are politically infeasible and with intra-and intergenerational analyses of the impact of climate policy. A case is also made for more empirical work on the gradual and catastrophic damages of global warming. Keywords Climate change • Green paradox • Carbon leakage • Political economy • Distribution • Tipping points • Climate damage estimates We gratefully acknowledge financial support from FP7-IDEAS-ERC Grant No. 269788. We also thank the
Three Essays on the Economics of Climate Change
2012
Introduction to the thesis 1 Chapter 1 Regional burden sharing of GHG mitigation policies-A Canadian perspective 7 1.1 Introduction 8 vi CONTENTS 1.6.3 Regional sectoral impacts 49 1.7 Concluding remarks 56 Appendices to Chapter Two 59 Appendix A List of equations 59 Appendix B List of variables 65 Appendix C List of parameters 69 Chapter 2 Endogenous technological change and emissions allowances 72 2.1 Introduction 73 2.2 Review of relevant literature 77 2.3 The model 79 2.3.
The Economics of Climate Change
American Economic Review, 2008
Global climate change poses a threat to the well-being of humans and other living things through impacts on ecosystem functioning, biodiversity, capital productivity, and human health. Climate change economics attends to this issue by offering theoretical insights and empirical findings relevant to the design of policies to reduce, avoid, or adapt to climate change. This economic analysis has yielded new estimates of mitigation benefits, improved understanding of costs in the presence of various market distortions or imperfections, better tools for making policy choices under uncertainty, and alternate mechanisms for allowing flexibility in policy responses. These contributions have influenced the formulation and implementation of a range of climate change policies at the domestic and international levels.