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Climate clubs and the macro-economic benefits of international cooperation on climate policy

Author

Listed:
  • Leonidas Paroussos

    (NTUA - National Technical University of Athens [Athens], E3MLab - Institute of Communication and Computer Systems - NTUA - National Technical University of Athens [Athens])

  • Antoine Mandel

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Kostas Fragkiadakis

    (E3MLab - Institute of Communication and Computer Systems - NTUA - National Technical University of Athens [Athens])

  • Panagiotis Fragkos

    (E3MLab - Institute of Communication and Computer Systems - NTUA - National Technical University of Athens [Athens])

  • Jochen Hinkel

    (Global Climate Forum e.V.)

  • Zoi Vrontisi

    (E3MLab - Institute of Communication and Computer Systems - NTUA - National Technical University of Athens [Athens])

Abstract

The Paris agreement has provided a new framework for climate policy. Complementary forms of international collaboration, such as climate clubs, are probably necessary to foster and mainstream the process of gradual and voluntary increase in nationally determined contributions. We provide a quantitative macro-economic assessment of the costs and benefits that would be associated with different climate club architectures. We find that the key benefits that could structure the club are enhanced technological diffusion and the provision of low-cost climate finance, which reduce investment costs and also enables developing countries to take full advantage of technological diffusion. Although they face the highest absolute mitigation cost, China and India are the largest relative winners from club participation because the burden faced by these countries to finance their energy transition can be massively reduced following their participation in the club.

Suggested Citation

  • Leonidas Paroussos & Antoine Mandel & Kostas Fragkiadakis & Panagiotis Fragkos & Jochen Hinkel & Zoi Vrontisi, 2019. "Climate clubs and the macro-economic benefits of international cooperation on climate policy," Post-Print halshs-02334592, HAL.
    • Handle: RePEc:hal:journl:halshs-02334592
    DOI: 10.1038/s41558-019-0501-1
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    Cited by:

    1. Marobhe, Mutaju Isaack & Kansheba, Jonathan Mukiza, 2024. "Airlines and climate policy uncertainty: Are the sector's stocks soaring or stalling?," Journal of Air Transport Management, Elsevier, vol. 115(C).
    2. Zhang, Kun & Yang, Zili & Liang, Qiao-Mei & Liao, Hua & Yu, Bi-Ying & Wei, Yi-Ming, 2023. "China's carbon emissions and energy demand under different methods of global mitigation cooperation: Application of an extended RICE model with energy details," Energy, Elsevier, vol. 285(C).
    3. Galina Kolev & Jürgen Matthes, 2021. "Protektionismus und Abschottungstendenzen bremsen und verändern die Globalisierung," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(11), pages 845-849, November.
    4. Igor Makarov, 2022. "Does resource abundance require special approaches to climate policies? The case of Russia," Climatic Change, Springer, vol. 170(1), pages 1-21, January.
    5. Antoine Mandel & Solmaria Halleck Vega & Dan-Xia Wang, 2020. "The contribution of technological diffusion to climate change mitigation: a network-based approach," Climatic Change, Springer, vol. 160(4), pages 609-620, June.
    6. Panagiotis Fragkos, 2021. "Assessing the Role of Carbon Capture and Storage in Mitigation Pathways of Developing Economies," Energies, MDPI, vol. 14(7), pages 1-20, March.
    7. Panagiotis Fragkos & Kostas Fragkiadakis & Leonidas Paroussos, 2021. "Reducing the Decarbonisation Cost Burden for EU Energy-Intensive Industries," Energies, MDPI, vol. 14(1), pages 1-23, January.
    8. Antimiani, Alessandro & Costantini, Valeria & Paglialunga, Elena, 2023. "Fossil fuels subsidy removal and the EU carbon neutrality policy," Energy Economics, Elsevier, vol. 119(C).
    9. Fragkos, Panagiotis & Fragkiadakis, Kostas & Sovacool, Benjamin & Paroussos, Leonidas & Vrontisi, Zoi & Charalampidis, Ioannis, 2021. "Equity implications of climate policy: Assessing the social and distributional impacts of emission reduction targets in the European Union," Energy, Elsevier, vol. 237(C).
    10. Xu, Xin & Huang, Shupei & Lucey, Brian M. & An, Haizhong, 2023. "The impacts of climate policy uncertainty on stock markets: Comparison between China and the US," International Review of Financial Analysis, Elsevier, vol. 88(C).
    11. Hübler, Michael & Wiese, Malin & Braun, Marius & Damster, Johannes, 2024. "The distributional effects of CO2 pricing at home and at the border on German income groups," Resource and Energy Economics, Elsevier, vol. 77(C).
    12. Kai Lessmann & Matthias Kalkuhl, 2024. "Climate Finance Intermediation: Interest Spread Effects in a Climate Policy Model," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 11(1), pages 213-251.
    13. Thomas J. Sargent & John Stachurski, 2024. "Dynamic Programming: Finite States," Papers 2401.10473, arXiv.org.
    14. Carè, R. & Weber, O., 2023. "How much finance is in climate finance? A bibliometric review, critiques, and future research directions," Research in International Business and Finance, Elsevier, vol. 64(C).
    15. Ma, Dandan & Zhang, Yunhan & Ji, Qiang & Zhao, Wan-Li & Zhai, Pengxiang, 2024. "Heterogeneous impacts of climate change news on China's financial markets," International Review of Financial Analysis, Elsevier, vol. 91(C).
    16. Kostas Fragkiadakis & Panagiotis Fragkos & Leonidas Paroussos, 2020. "Low-Carbon R&D Can Boost EU Growth and Competitiveness," Energies, MDPI, vol. 13(19), pages 1-29, October.
    17. Kostas Fragkiadakis & Ioannis Charalampidis & Panagiotis Fragkos & Leonidas Paroussos, 2020. "Economic, Trade and Employment Implications from EVs Deployment and Policies to Support Domestic Battery Manufacturing in the EU," Foreign Trade Review, , vol. 55(3), pages 298-319, August.
    18. John F. Raffensperger, 2020. "A price on warming with a supply chain directed market," Papers 2003.05114, arXiv.org, revised Mar 2021.
    19. Leonidas Paroussos & Kostas Fragkiadakis & Panagiotis Fragkos, 2020. "Macro-economic analysis of green growth policies: the role of finance and technical progress in Italian green growth," Climatic Change, Springer, vol. 160(4), pages 591-608, June.
    20. Sinha, Avik & Shah, Muhammad Ibrahim & Mehta, Atul & Sharma, Rajesh, 2022. "Impact of Energy Innovation on Greenhouse Gas Emissions: Moderation of Regional Integration and Social Inequality in Asian Economies," ADBI Working Papers 1304, Asian Development Bank Institute.
    21. Fragkos, Panagiotis & Laura van Soest, Heleen & Schaeffer, Roberto & Reedman, Luke & Köberle, Alexandre C. & Macaluso, Nick & Evangelopoulou, Stavroula & De Vita, Alessia & Sha, Fu & Qimin, Chai & Kej, 2021. "Energy system transitions and low-carbon pathways in Australia, Brazil, Canada, China, EU-28, India, Indonesia, Japan, Republic of Korea, Russia and the United States," Energy, Elsevier, vol. 216(C).

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