The economics of climate change mitigation is part of the economics of climate change related to climate change mitigation, that is actions that are designed to limit the amount of long-term climate change. Mitigation may be achieved through the reduction of greenhouse gas (GHG) emissions and the enhancement of sinks that absorb GHGs, for example forests.
The atmosphere is an international public good and GHG emissions are an international externality. A change in the quality of the atmosphere does not affect the welfare of all individuals and countries equally.
GHG emissions are unevenly distributed around the world, as are the potential impacts of climate change. Nations with higher than average emissions that face potentially small negative/positive climate change impacts have little incentive to reduce their emissions. Nations with relatively low levels of emissions that face potentially large negative climate change impacts have a large incentive to reduce emissions. Nations that avoid mitigation can benefit from free-riding on the actions of others, and may even enjoy gains in trade and/or investment. The unequal distribution of benefits from mitigation, and the potential advantages of free-riding, made it difficult to secure the Paris Agreement, which aims to reduce emissions.
Overlapping generations model
Mitigation of climate change can be considered a transfer of wealth from the present generation to future generations. The amount of mitigation determines the composition of resources (e.g., environmental or material) that future generations receive. Across generations, the costs and benefits of mitigation are not equally shared: future generations potentially benefit from mitigation, while the present generation bear the costs of mitigation but do not directly benefit (ignoring possible co-benefits, such as reduced air pollution). If the current generation also benefitted from mitigation, it might lead them to be more willing to bear the costs of mitigation.
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The course introduces non economists to the economic analysis of climate change: economic activity and climate change, estimation of climate impacts, optimal mitigation and adaptation, national and in
This course is an introduction to economic theory applied to environmental issues. It presents the methods used to assess environmental impacts and natural resources as well as environmental regulatio
The course equips students with a comprehensive scientific understanding of climate change covering a wide range of topics from physical principles, historical climate change, greenhouse gas emissions
The economic impacts of climate change vary geographically and are difficult to forecast exactly. Researchers have warned that current economic forecasts may seriously underestimate the effects of climate change, and point to the need for new models that give a more accurate picture of potential damages. Nevertheless, one 2018 study found that potential global economic gains if countries implement mitigation strategies to comply with the 2 °C target set at the Paris Agreement are in the vicinity of US$17 trillion per year up to 2100 compared to a very high emission scenario.
The Stern Review on the Economics of Climate Change is a 700-page report released for the Government of the United Kingdom on 30 October 2006 by economist Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics (LSE) and also chair of the Centre for Climate Change Economics and Policy (CCCEP) at Leeds University and LSE. The report discusses the effect of global warming on the world economy.
The economic analysis of climate change explains how economic thinking, tools and techniques are applied to calculate the magnitude and distribution of damage caused by climate change. It also informs the policies and approaches for mitigation and adaptation to climate change from global to household scales. This topic is also inclusive of alternative economic approaches, including ecological economics and degrowth. Economic analysis of climate change is considered challenging as it is a long-term problem and has substantial distributional issues within and across countries.
Emphasizes the urgency of global climate change mitigation efforts, exploring strategies, challenges, and the importance of early action.
Explores challenges and ethical dilemmas in reducing greenhouse gas emissions, emphasizing the importance of taking action for economic and ethical reasons.
Introduces Integrated Assessment Models, combining economic and climate models to simulate future pathways and policy scenarios.
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