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Climate Policies: a Burden or a Gain?

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  • Thierry Bréchet

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

  • Henry Tulkens

    (CORE, Université catholique de Louvain, Belgium)

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

  • Thierry Bréchet & Henry Tulkens, 2013. "Climate Policies: a Burden or a Gain?," Working Papers 2013.21, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2013.21
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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," Revue d'économie politique, Dalloz, vol. 126(4), pages 471-486.
    2. Tulkens, Henry, 2016. "COP 21 and Economic Theory: Taking Stock," ET: Economic Theory 236237, Fondazione Eni Enrico Mattei (FEEM).
    3. Miguel Rodríguez & Yolanda Pena-Boquete, 2013. "Mishandling carbon intensities," Working Papers 1302, Universidade de Vigo, Departamento de Economía Aplicada.

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    More about this item

    Keywords

    Climate Policy; Integrated Assessment; Cost-Benefit Analysis; Climate Cooperation;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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