We study optimal climate policy in a global economy where regions differ in wealth and climate vulnerability. Carbon emissions from production lead to output losses, and there is a technology for emissions absorption. We provide an aggregation result: the model with heterogeneity can be cast...

In this paper we show that both climate models and economic models studying the effects of climate change are characterized by high uncertainty. Hence, far reaching policy implications such as the net zero goal lack a definite scientific foundation. Neverthelss, it cannot be excluded that the...

Carbon pricing regulates emission flows and collects rents from underlying fossil resource stocks. The resulting investment shift implies lower climate policy costs and improved welfare if capital is underaccumulated. We prove that under emission trading, such a beneficial macroeconomic...

In the framework of the Paris Agreement implementation, financial transfers remain a major point of negotiation for addressing equity concerns raised by the ambitious climate objectives. In complement to the theoretical, experimental and numerical studies that have examined the role of transfers...

We study how the scarcity of non-market goods, such as environmental amenities, affects the economic appraisal of climate policy. To this end, we perform a comprehensive analysis of the change in relative prices of non-market goods in the widespread climate-economy model DICE. We show that DICE...

The aim of the paper is to present evidence that China and India are, and will remain, two very different actors in international negotiations to control global warming. We base our conclusions on historical data and on scenarios until 2050. The Business-as-Usual scenario (BaU) is compared to...

The aim of the paper is to present evidence that China and India are, and will remain, two very different actors in international negotiations to control global warming. We base our conclusions on historical data and on scenarios until 2050. The Business-as-Usual scenario (BaU) is compared to...

Why have policies aimed at reducing the demand for carbon not succeeded in slowing down global carbon extraction and CO2 emissions, and why have carbon prices failed to increase over the last three decades? This comment argues that this is because of the Green Paradox, i.e. – (the anticipation...