Non-cooperative and cooperative responses to climate catastrophes in the global economy: a North-South perspective

"The global response to a catastrophic shock to productivity which becomes more imminent with global warming is to have carbon taxes to curb the risk of a calamity and to accumulate precautionary capital to facilitate smoothing of consumption. Our multi-region model of growth and climate change...

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Bibliographic Details
Main Authors: van der Ploeg, Frederick, de Zeeuw, Aart
Institution:ETUI-European Trade Union Institute
Format: TEXT
Language:English
Published: Oxford 2015
University of Oxford
Subjects:
Online Access:https://www.labourline.org/KENTIKA-19114339124919325119-Non-cooperative-and-cooperativ.htm
Description
Summary:"The global response to a catastrophic shock to productivity which becomes more imminent with global warming is to have carbon taxes to curb the risk of a calamity and to accumulate precautionary capital to facilitate smoothing of consumption. Our multi-region model of growth and climate change indicates that without international lump-sum transfers the cooperative global response to such stochastic tipping points requires converging carbon taxes for developing and developed regions. Non-cooperative responses lead to a bit more precautionary saving and lower diverging carbon taxes. Precautionary capital suffers less from international free-rider problems than the carbon taxes. We illustrate the various outcomes with a calibrated North-South model of the global economy."
Physical Description:34 p.
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