1,721,342 research outputs found
Delayed Participation of Developing Countries to Climate Agreements: Should Action in the EU and US be Postponed?
Full text linkThis paper analyses the cost implications for climate policy in developed countries if developing countries are unwilling to adopt measures to reduce their own GHG emissions. First, we assume that a 450 CO2 (550 CO2e) ppmv stabilisation target is to be achieved and that Non Annex1 (NA1) countries decide to delay their GHG emission reductions by 30 years. What would be the cost difference between this scenario and a case in which both developed and developing countries start reducing their emissions at the same time? Then, we look at a scenario in which the timing of developing countries’ participation is uncertain and again we compute the costs of climate policy in developed and developing countries. We findthat delayed participation of NA1 countries has a negative impact on climate policy costs. Economic inefficiencies can be as large as 10-25 TlnUSD. However, this additional cost wanes when developing countries are allowed to trade emission reductions from their baseline emission paths during the 30-year delay period. Thus, irrespective of whether NA1 countriesare immediately assigned an emission reduction target or not, they should nonetheless be included in a global carbon market. Technology deployment is also affected by the timing of developing countries’ mitigation measures. Delayed NA1-country participation in a climateagreement would scale down the deployment of coal with CCS throughout the century. Onthe other hand, innovation in the form of energy R&D investments would be positivelyaffected, since it would become crucial in developed countries. Finally, uncertainty about the timing of NA1-country participation does not modify the optimal abatement strategy for developed countries and does not alter policy costs as long as a global carbon market is in place.delayed action, climate policy, stabilisation costs, uncertain participation
Modelling Economic Impacts of Alternative International Climate Policy Architectures.A Quantitative and Comparative Assessment of Architectures for Agreement
Full text linkThis paper provides a quantitative comparison of the main architectures for an agreement on climate policy. Possible successors to the Kyoto protocol are assessed according to four criteria: economic efficiency; environmental effectiveness; distributional implications; and their political acceptability which is measured in terms of feasibility and enforceability. The ultimate aim is to derive useful information for designing a future agreement on climate change control.climate policy, integrated modelling, international agreements
Uncertain R&D, backstop technology and GHGs stabilization
Full text linkThis paper analyses optimal investments in innovation when dealing with a stringent climate target and with the uncertain effectiveness of R&D
Climate Change Mitigation Strategies in Fast-Growing Countries: The Benefits of Early Action
Full text linkThis paper builds on the assumption that OECD countries are (or will soon be) taking actions to reduce their greenhouse gas emissions. These actions, however, will not be sufficient to control global warming, unless developing countries also get involved in the cooperative effort to reduce GHG emissions. This paper investigates the best short-term strategies that emerging economies can adopt in reacting to OECD countries’ mitigation effort, given the common long-term goal to prevent excessive warming without hampering economic growth. Results indicate that developing countries would incur substantial economic losses by following a myopic strategy that disregards climate in the short-run, and that their optimal investment behaviour is to anticipate the implementation of a climate policy by roughly 10 years. Investing in innovation ahead of time is also found to be advantageous. The degree of policy anticipation is shown to be important in determining the financial transfers of an international carbon market meant to provide incentives for the participation of developing countries. This is especially relevant for China, whose recent and foreseeable trends of investments in innovation are consistent with the adoption of domestic emission reduction obligations in 2030.energy-economy modelling, climate policy, developing countries
Delayed Action and Uncertain Targets. How Much Will Climate Policy Cost?
Full text linkDespite the growing concern about actual on-going climate change, there is little consensus about the scale and timing of actions needed to stabilise the concentrations of greenhouse gases. Many countries are unwilling to implement effective mitigation strategies, at least in the short-term, and no agreement on an ambitious global stabilisation target has yet been reached. It is thus likely that some, if not all countries, will delay the adoption of effective climate policies. This delay will affect the cost of future policy measures that will be required to abate an even larger amount of emissions. What additional economic cost of mitigation measures will this delay imply? At the same time, the uncertainty surrounding the global stabilisation target to be achieved crucially affects short-term investment and policy decisions. What will this uncertainty cost? Is there a hedging strategy that decision makers can adopt to cope with delayed action and uncertain targets? This paper addresses these questions by quantifying the economic implications of delayed mitigation action, and by computing the optimal abatement strategy in the presence of uncertainty about a global stabilisation target (which will be agreed upon in future climate negotiations). Results point to short-term inaction as the key determinant for the economic costs of ambitious climate policies. They also indicate that there is an effective hedging strategy that could minimise the cost of climate policy under uncertainty, and that a short-term moderate climate policy would be a good strategy to reduce the costs of delayed action and to cope with uncertainty about the outcome of future climate negotiations. By contrast, an insufficient short-term effort significantly increases the costs of compliance in the long-term.uncertainty, climate policy, stabilisation costs, delayed action
Nuclear versus Coal plus CCS: A Comparison of Two Competitive Base-load Climate Control Options
Full text linkIn this paper we analyze the relative importance and mutual behavior of two competing base-load electricity generation options that each are capable of contributing significantly to the abatement of global CO2 emissions: nuclear energy and coal-based power production complemented with CO2 capture and storage (CCS). We also investigate how, in scenarios from an integrated assessment model that simulates the economics of a climate-constrained world, the prospects for nuclear energy would change if exogenous limitations on the spread of nuclear technology were relaxed. Using the climate change economics model WITCH we find that until 2050 the resulting growth rates of nuclear electricity generation capacity become comparable to historical rates observed during the 1980s. Given that nuclear energy continues to face serious challenges and contention, we inspect how extensive the improvements of coal-based power equipped with CCS technology would need to be if our model is to significantly scale down the construction of new nuclear power plants.Economic Competition, Electricity Sector, Nuclear Power, Coal Power, CCS, Renewables, Climate Policy
Climate Change Mitigation, Technological Innovation And Adaptation
No full textThis book presents provides a rigorous yet accessible treatment of the main topics in climate change policy using a large body of research generated using WITCH (World Induced Technical Change Hybrid), an innovative and path-breaking integrated assessment model
Thin-Capitalization Rules and Company Responses Experience from German Legislation
Full text linkBy granting intracompany loans to their foreign affiliates, multinational firms may reduce their tax liability abroad. Many countries have legislated thin-capitalization rules (TCRs) that limit the allowable levels of intracompany loans or restrict interest deductibility if certainthresholds are crossed. This paper empirically analyzes the effect of the German TCR on corporate policy. We find that tightening the regulations in 2001 had some limiting effect on leverage. Foreign affiliates reacted by reducing intracompany loans and increasing equity,with no significant evidence of reduced real investment. A possible reason for the limited impact of the TCR was that multinational firms had the option to work around the regulation by using holding company structures. Indeed, holding companies have been used to shift hugeamounts of intracompany loans onto the books of German affiliates. At the same time, however, only part of these observed reorganizations seem to have been a reaction to TCR.multinational firm, debt, thin capitalization, financial structure
Human Capital Formation and Global Warming Mitigation: Evidence from an Integrated Assessment Model
Full text linkBased on recent empirical evidence, this paper includes human capital and knowledge in an integrated assessment model and it assesses the interplay between innovation, human capital, climate change, and education policies. Results indicate that climate policy stimulates a dedicated form of energy-knowledge without reducing generic R&D investments. Since advancements in labour productivity have a negative impact on the environment because labour is assumed to be complement to energy, climate policy reduces education investments, on which human capital is built. However, a policy mix combining climate and education targets shows that education and climate goals can be coupled incurring in small additional economic penalties.climate policy, innovation, human capital
Climate change mitigation strategies in fast-growing countries : the benefits of early action
Full text linkThis paper builds on the assumption that OECD countries are (or will soon be) taking actions to reduce their greenhouse gas emissions. These actions, however, will not be sufficient to control global warming, unless developing countries also get involved in the cooperative effort to reduce GHG emissions. This paper investigates the best short-term strategies that emerging economies can adopt in reacting to OECD countrie's mitigation effort, given the common long-term goal to prevent excessive warming without hampering economic growth. Results indicate that developing countries would incur substantial economic losses by following a myopic strategy that disregards climate in the short-run, and that their optimal investment behaviour is to anticipate the implementation of a climate policy by roughly 10 years. Investing in innovation ahead of time is also found to be advantageous. The degree of policy anticipation is shown to be important in determining the financial transfers of an international carbon market meant to provide incentives for the participation of developing countries. This is especially relevant for China, whose recent and foreseeable trends of investments in innovation are consistent with the adoption of domestic emission reduction obligations in 2030
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