The purpose of this article is twofold: First to discuss three misconceptions in the debate on climate policies: i) that de-growth is necessary, ii) that the market economy is part of the problem rather than part of the solution to climate change, and iii) that the only policy tool needed is to...

We incorporate three important aspects of current climate policy, unilateralism, demand side approach and a climate target, in a multi-country model with flow dependent fossil fuel extraction costs and a backstop. It turns out that the optimal climate coalition should encompass all countries...