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Climate policies: a burden or a gain?

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  • BRECHET, Thierry

    () (Université catholique de Louvain, CORE and Louvain School of Management, Belgium)

  • TULKENS, Henry

    () (Université catholique de Louvain, CORE, Belgium)

Abstract

That climate policies are costly is evident and therefore often creates major fears. But the alernative (no action) also has a cost. Mitigation costs and damages incurred depend on what the climate policies are, and in addition, 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 make use of this criterion in the context of international climate cooperation.

Suggested Citation

  • BRECHET, Thierry & TULKENS, Henry, 2013. "Climate policies: a burden or a gain?," CORE Discussion Papers 2013002, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2013002
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    References listed on IDEAS

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    Cited by:

    1. Henry Tulkens, 2016. "COP 21 and Economic Theory: Taking Stock," CESifo Working Paper Series 5918, CESifo Group Munich.
    2. Henry Tulkens, 2016. "COP 21 and Economic Theory: Taking Stock," Working Papers 2016.40, Fondazione Eni Enrico Mattei.
    3. Miguel Rodríguez & Yolanda Pena-Boquete, 2013. "Mishandling carbon intensities," Working Papers 1302, Universidade de Vigo, Departamento de Economía Aplicada.
    4. Tulkens, Henry, 2016. "COP 21 and Economic Theory: Taking Stock," ET: Economic Theory 236237, Fondazione Eni Enrico Mattei (FEEM).

    More about this item

    Keywords

    climate policy; integrated assessment; cost-benefit analysis; climate coalitions;

    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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