Optimal Climate Policy and the Future of World Economic Development

How much should the present generations sacrifice to reduce emissions today, in order to reduce the future harms of climate change? Within climate economics, debate on this question has been focused on so-called “ethical parameters” of social time preference and inequality aversion. We show that opt...

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Main Authors:	Budolfson, Mark, Dennig, Francis, Fleurbaey, Marc, Scovronick, Noah, Siebert, Asher, Spears, Dean, Wagner, Fabian
Format:	Journal Article
Published:	Published by Oxford University Press on behalf of the World Bank 2020
Subjects:	CLIMATE POLICY CLIMATE CHANGE CARBON TAX POPULATION GROWTH TOTAL FACTOR PRODUCTIVITY
Online Access:	http://hdl.handle.net/10986/34287

id	okr-10986-34287
recordtype	oai_dc
spelling	okr-10986-342872021-05-25T10:54:38Z Optimal Climate Policy and the Future of World Economic Development Budolfson, Mark Dennig, Francis Fleurbaey, Marc Scovronick, Noah Siebert, Asher Spears, Dean Wagner, Fabian CLIMATE POLICY CLIMATE CHANGE CARBON TAX POPULATION GROWTH TOTAL FACTOR PRODUCTIVITY How much should the present generations sacrifice to reduce emissions today, in order to reduce the future harms of climate change? Within climate economics, debate on this question has been focused on so-called “ethical parameters” of social time preference and inequality aversion. We show that optimal climate policy similarly importantly depends on the future of the developing world. In particular, although global poverty is falling and the economic lives of the poor are improving worldwide, leading models of climate economics may be too optimistic about two central predictions: future population growth in poor countries, and future convergence in total factor productivity (TFP). We report results of small modifications to a standard model: under plausible scenarios for high future population growth (especially in sub-Saharan Africa) and for low future TFP convergence, we find that optimal near-term carbon taxes could be substantially larger. 2020-08-06T16:41:46Z 2020-08-06T16:41:46Z 2019-02 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/34287 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research Publications & Research :: Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	CLIMATE POLICY CLIMATE CHANGE CARBON TAX POPULATION GROWTH TOTAL FACTOR PRODUCTIVITY
spellingShingle	CLIMATE POLICY CLIMATE CHANGE CARBON TAX POPULATION GROWTH TOTAL FACTOR PRODUCTIVITY Budolfson, Mark Dennig, Francis Fleurbaey, Marc Scovronick, Noah Siebert, Asher Spears, Dean Wagner, Fabian Optimal Climate Policy and the Future of World Economic Development
description	How much should the present generations sacrifice to reduce emissions today, in order to reduce the future harms of climate change? Within climate economics, debate on this question has been focused on so-called “ethical parameters” of social time preference and inequality aversion. We show that optimal climate policy similarly importantly depends on the future of the developing world. In particular, although global poverty is falling and the economic lives of the poor are improving worldwide, leading models of climate economics may be too optimistic about two central predictions: future population growth in poor countries, and future convergence in total factor productivity (TFP). We report results of small modifications to a standard model: under plausible scenarios for high future population growth (especially in sub-Saharan Africa) and for low future TFP convergence, we find that optimal near-term carbon taxes could be substantially larger.
format	Journal Article
author	Budolfson, Mark Dennig, Francis Fleurbaey, Marc Scovronick, Noah Siebert, Asher Spears, Dean Wagner, Fabian
author_facet	Budolfson, Mark Dennig, Francis Fleurbaey, Marc Scovronick, Noah Siebert, Asher Spears, Dean Wagner, Fabian
author_sort	Budolfson, Mark
title	Optimal Climate Policy and the Future of World Economic Development
title_short	Optimal Climate Policy and the Future of World Economic Development
title_full	Optimal Climate Policy and the Future of World Economic Development
title_fullStr	Optimal Climate Policy and the Future of World Economic Development
title_full_unstemmed	Optimal Climate Policy and the Future of World Economic Development
title_sort	optimal climate policy and the future of world economic development
publisher	Published by Oxford University Press on behalf of the World Bank
publishDate	2020
url	http://hdl.handle.net/10986/34287
_version_	1764480580618027008

Optimal Climate Policy and the Future of World Economic Development

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