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Fund-raising and Allocation of Green Climate Fund: Taking Global Pareto Optimality and Fiscal Balance into Consideration

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  • Wang, Ying

Abstract

This study analyzes how the Green Climate Fund (GCF) should raise and allocate funds to achieve Pareto optimality in climate governance globally and its own fiscal balance. To make the conclusion more suitable for global climate governance analysis, this study modifies the hypothesis of the public externality model constructed by Baumol and Oates. Subsequently, by comparing the Pareto optimality model of global climate governance and market equilibrium model, this study infers the unique price conditions to induce the market to satisfy Pareto-optimality requirements. Subsequently, this study deduces the rules and the possible ways that must be followed for raising capital and allocating of GCFs while considering global Pareto optimality and fiscal balance. The study observes that the equilibrium results of the international climate game will not achieve the global Pareto-optimality and the financial balance of GCF simultaneously when each country anticipates that the GCF aims to Pareto optimality in climate governance globally and its own fiscal balance.

Suggested Citation

  • Wang, Ying, 2021. "Fund-raising and Allocation of Green Climate Fund: Taking Global Pareto Optimality and Fiscal Balance into Consideration," MPRA Paper 106861, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:106861
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    File URL: https://mpra.ub.uni-muenchen.de/106861/1/MPRA_paper_106861.pdf
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    References listed on IDEAS

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    1. Marchiori, Carmen & Dietz, Simon & Tavoni, Alessandro, 2017. "Domestic politics and the formation of international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 115-131.
    2. Antimiani Alessandro & Valeria Costantini & Anil Markandya & Chiara Martini & Alessandro Palma & Maria Cristina Tommasino, 2014. "A dynamic CGE modelling approach for analyzing trade-offs in climate change policy options: the case of Green Climate Fund," SEEDS Working Papers 1614, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jun 2014.
    3. Chander, Parkash, 2017. "Subgame-perfect cooperative agreements in a dynamic game of climate change," Journal of Environmental Economics and Management, Elsevier, vol. 84(C), pages 173-188.
    4. CHANDER, Parkash, 2010. "Cores of games with positive externalities," LIDAM Discussion Papers CORE 2010004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Chander, Parkash & Wooders, Myrna, 2020. "Subgame-perfect cooperation in an extensive game," Journal of Economic Theory, Elsevier, vol. 187(C).
    6. F. Javier Manzanares, 2017. "The Green Climate Fund – a beacon for climate change action," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 2(1), pages 1-5, September.
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    Keywords

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    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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