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Cost comparison of climate change mitigation options

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  • Pena-Levano, Luis
  • Taheripour, Farzad
  • Tyner, Wally

Abstract

The global community has reaffirmed its commitment to reduce greenhouse emissions to control the expected increase in the global average temperature. Thus, many governments and private sectors are interested in the cost-efficiency of frequently discussed mitigation methods – forest and pasture carbon sequestration (FPCS) subsidy, carbon tax, and biofuels – and their impacts on the global economy. We modified our new developed computable general equilibrium for the analysis. We simulate different rates to observe their mitigation potentials. Our results suggest that there is a trade-off between cost-efficiency and emission reduction between policies, where tax can achieve larger emission reductions under the same rate of FPCS but with higher economic costs. Likewise, combining tax and an equivalent subsidy has a larger reduction potential due to the synergistic effects, but food prices increase dramatically. Biofuels proved to be costlier than FPCS or tax. Keywords: climate change, food price, mitigation policies, sequestration subsidy, carbon tax JEL codes: Q15, R52, Q54.

Suggested Citation

  • Pena-Levano, Luis & Taheripour, Farzad & Tyner, Wally, 2020. "Cost comparison of climate change mitigation options," Conference papers 333134, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333134
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    More about this item

    Keywords

    Environmental Economics and Policy;

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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