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Climate Policy Options: A Comparison of Economic Performance
Author:
Jean Chateau
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Ms. Florence Jaumotte 0000000404811396 https://isni.org/isni/0000000404811396 International Monetary Fund

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Gregor Schwerhoff
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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 242
Language:
English
Publication Date:
09 Dec 2022
DOI:
https://doi.org/10.5089/9798400225239.001
ISBN:
9798400225239
ISSN:
1018-5941
Pages:
48
Keywords:
Climate policy; policy coordination; carbon leakage; carbon tax; regulation.; climate policy option; Policy stringency; EITE sectors scenario; ambition level; Policy instrument; Greenhouse gas emissions; Non-renewable resources; Global
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We use a global computable general equilibrium model to compare the economic performance of alternative climate policies along multiple dimensions, including macroeconomic outcomes, energy prices, and trade competitiveness. Carbon pricing which keeps the aggregate cost lower and preserves better the overall competitiveness than across-the-board regulation is the first-best policy, especially in energy intensive and trade exposed industries. Regulations and feebates are good alternatives in the power sector, where technological substitution is possible. Feed-in subsidies, if used alone, are not cost effective.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2022: Issue 242