Economic costs of aggressive climate policy

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Whether aggressive climate policy is warranted crucially depends on the economic costs of emission cuts. Different from previous studies, this study estimates the economic costs of emission costs with a reduced-form approach. The major advantages of this approach are its simplicity and less assumption dependence. Based on the study’s parameter estimates, it is found that a 25% aggressive reduction in CO2 emissions from 1990 levels will lead to a 3.69% decrease in the combined GDP of developed OECD countries. Although the cost is significant, in relation to the benefits of such policy, this study’s finding still suggests that nations should implement more aggressive climate policy.

Original languageEnglish (US)
Pages (from-to)312-317
Number of pages6
JournalEnergy Sources, Part B: Economics, Planning and Policy
Volume12
Issue number4
DOIs
StatePublished - Apr 3 2017

Fingerprint

environmental policy
Economics
economics
cost
Costs
OECD
Gross Domestic Product

Keywords

  • carbon emissions
  • Climate change policy
  • economic costs
  • fixed-effects panel regression
  • reduced-form model

ASJC Scopus subject areas

  • Chemical Engineering(all)
  • Renewable Energy, Sustainability and the Environment
  • Nuclear Energy and Engineering
  • Fuel Technology
  • Energy Engineering and Power Technology
  • Environmental Science(all)

Cite this

Economic costs of aggressive climate policy. / Zhao, Xiaobing; Du, Ding.

In: Energy Sources, Part B: Economics, Planning and Policy, Vol. 12, No. 4, 03.04.2017, p. 312-317.

Research output: Contribution to journalArticle

@article{2b209b916ebc4707a8e07829a04668e3,
title = "Economic costs of aggressive climate policy",
abstract = "Whether aggressive climate policy is warranted crucially depends on the economic costs of emission cuts. Different from previous studies, this study estimates the economic costs of emission costs with a reduced-form approach. The major advantages of this approach are its simplicity and less assumption dependence. Based on the study’s parameter estimates, it is found that a 25{\%} aggressive reduction in CO2 emissions from 1990 levels will lead to a 3.69{\%} decrease in the combined GDP of developed OECD countries. Although the cost is significant, in relation to the benefits of such policy, this study’s finding still suggests that nations should implement more aggressive climate policy.",
keywords = "carbon emissions, Climate change policy, economic costs, fixed-effects panel regression, reduced-form model",
author = "Xiaobing Zhao and Ding Du",
year = "2017",
month = "4",
day = "3",
doi = "10.1080/15567249.2014.974786",
language = "English (US)",
volume = "12",
pages = "312--317",
journal = "Energy Sources, Part B: Economics, Planning and Policy",
issn = "1556-7249",
publisher = "Taylor and Francis Ltd.",
number = "4",

}

TY - JOUR

T1 - Economic costs of aggressive climate policy

AU - Zhao, Xiaobing

AU - Du, Ding

PY - 2017/4/3

Y1 - 2017/4/3

N2 - Whether aggressive climate policy is warranted crucially depends on the economic costs of emission cuts. Different from previous studies, this study estimates the economic costs of emission costs with a reduced-form approach. The major advantages of this approach are its simplicity and less assumption dependence. Based on the study’s parameter estimates, it is found that a 25% aggressive reduction in CO2 emissions from 1990 levels will lead to a 3.69% decrease in the combined GDP of developed OECD countries. Although the cost is significant, in relation to the benefits of such policy, this study’s finding still suggests that nations should implement more aggressive climate policy.

AB - Whether aggressive climate policy is warranted crucially depends on the economic costs of emission cuts. Different from previous studies, this study estimates the economic costs of emission costs with a reduced-form approach. The major advantages of this approach are its simplicity and less assumption dependence. Based on the study’s parameter estimates, it is found that a 25% aggressive reduction in CO2 emissions from 1990 levels will lead to a 3.69% decrease in the combined GDP of developed OECD countries. Although the cost is significant, in relation to the benefits of such policy, this study’s finding still suggests that nations should implement more aggressive climate policy.

KW - carbon emissions

KW - Climate change policy

KW - economic costs

KW - fixed-effects panel regression

KW - reduced-form model

UR - http://www.scopus.com/inward/record.url?scp=85013466859&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85013466859&partnerID=8YFLogxK

U2 - 10.1080/15567249.2014.974786

DO - 10.1080/15567249.2014.974786

M3 - Article

VL - 12

SP - 312

EP - 317

JO - Energy Sources, Part B: Economics, Planning and Policy

JF - Energy Sources, Part B: Economics, Planning and Policy

SN - 1556-7249

IS - 4

ER -