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Balancing Climate Policies and Economic Development in the Mediterranean Countries

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  • Castelli, Chiara
  • Castellini, Marta
  • Gusperti, Camilla
  • Lupi, Veronica
  • Vergalli, Sergio

Abstract

The goal of this work is to improve the spatial representation of the Regional Dynamic Integrated model of Climate and the Economy (RICE), in its ’99 version, focusing on the Mediterranean countries, while also updating the calibration to the base year 2015. We evaluate the impact of climate damages and temperature changes in several scenarios, drawing comparisons across regions. Thanks to the theoretical structure of the model, which considers energy as an explicit input factor, we examine macroeconomic and energy indicators across regions. We find that a general slow down in economic growth is needed to decrease emissions and keep temperature change within 2°C by the end of this century. Our results are embedded in a framework showing the costs of delaying the energy transition. Our figures relies on fossil-fuel inputs and exogenous energy saving improvements.

Suggested Citation

  • Castelli, Chiara & Castellini, Marta & Gusperti, Camilla & Lupi, Veronica & Vergalli, Sergio, 2024. "Balancing Climate Policies and Economic Development in the Mediterranean Countries," FEEM Working Papers 344175, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemwp:344175
    DOI: 10.22004/ag.econ.344175
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    Keywords

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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