While international trade can offer gains from specialization and access to a wider range of products, it is also closely interlinked with global environmental problems, above all, anthropogenic climate change. This survey provides a structured overview of the economic literature on the...

There are demands on central banks and financial regulators to take on new responsibilities for supporting the transition to a low-carbon economy. Regulators can indeed facilitate the reorientation of financial flows necessary for the transition. But their powers should not be overestimated....

At least ten Latin American and Caribbean countries have pledged to achieve carbon neutrality. Has electricity planning in the region evolved towards reaching these goals? We compare power generation capacity in 2023 to announced plans in 2019. We then estimate committed emissions from existing...

In absence of joint global climate action, several jurisdictions unilaterally restrict their domestic demand for fossil fuels. Another policy option for fossil fuel producing countries, not much explored, is to reduce own supply of fossil fuels. We explore analytically and numerically how...

We analyze and critique how optimizing Integrated Assessment Models, and specifically the widely-used DICE model, represent abatement costs. Many such models assume temporal independence – abatement costs in one period are not affected by prior abatement. We contrast this with three dimensions...

Green bonds allow firms to commit to climate-friendly projects. Equity investors react positively to their announcement. Based on prior empirical studies, we suggest that green bond commitments help managers signal the profitability of their green projects and that they do so because they are...

We propose a development-compatible refunding system designed to mitigate climate change. Industrial countries pay an initial fee into a global fund. Each country chooses its national carbon tax. Part of the global fund is refunded to developing and industrial countries, in proportion to the...

In this paper, we use an integrated assessment model to examine the implications of not recognizing, and partially recognizing forest carbon in climate policy. Specifically, we investigate the impact of an asymmetric carbon policy that recognizes emissions from fossil fuels while ignoring...

Domestic carbon pricing policies may impose adverse competitiveness risks on energy-intensive firms and industries competing with foreign firms that may bear a lower or zero price on carbon. The risks of competitiveness effects include adverse economic outcomes — reduced production, lower...

Background paper prepared for the October 2020 IMF World Economic Outlook. This paper provides a detailed presentation of the simulation results from the October 2020 IMF World Economic Outlook chapter 3 and an additional scenario with carbon pricing only for comparison with the comprehensive...