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Climate Policies: A Burden or a Gain?

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  • Bréchet, Thierry
  • Tulkens, Henry

Abstract

That climate policies are costly is evident and therefore often creates major fears. But the alternative (no action) also has a cost. Mitigation costs and damages incurred depend on what the climate policies are; moreover, they are substitutes. This brings climate policies naturally in the realm of benefit-cost analysis. In this paper we illustrate the “direct” cost components of various policies, and then confront them with the benefits generated, that is, the damage cost avoided. However, the sheer benefit-cost criterion is not a sufficient incentive to induce cooperation among countries, a necessary condition for an effective global climate policy. Thus, we also explore how to use this criterion in the context of international climate cooperation.

Suggested Citation

  • Bréchet, Thierry & Tulkens, Henry, 2013. "Climate Policies: A Burden or a Gain?," Climate Change and Sustainable Development 148894, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcl:148894
    DOI: 10.22004/ag.econ.148894
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    Cited by:

    1. Henry Tulkens, 2016. "COP 21 and Economic Theory: Taking Stock," Revue d'économie politique, Dalloz, vol. 126(4), pages 471-486.
    2. Miguel Rodríguez & Yolanda Pena-Boquete, 2013. "Mishandling carbon intensities," Working Papers 1302, Universidade de Vigo, Departamento de Economía Aplicada.
    3. Tulkens, Henry, 2016. "COP 21 and Economic Theory: Taking Stock," ET: Economic Theory 236237, Fondazione Eni Enrico Mattei (FEEM).

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    Keywords

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    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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