Clubs, R&D, and Climate Finance: Incentives for Ambitious GHG Emission Reductions

7 Pages Posted: 22 Sep 2017

See all articles by Carlo Carraro

Carlo Carraro

Ca' Foscari University of Venice; CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Centre for European Policy Studies, Brussels; Green Growth Knowledge Platform

Date Written: September 21, 2017

Abstract

Climate clubs, namely subgroups of countries implementing more ambitious and effective climate policies than others, may be the only practical approach to address the lack of incentives to reduce GHG emissions on the part of most, if not all, countries. In climate clubs, incentives to undertake ambitious GHG emission reduction efforts may come from adopting R&D and financial policies that provide benefits exclusively to club members. R&D and financial policies are beneficial because they provide innovation to reduce the costs of a unit of abated carbon and financial or insurance schemes to reduce the costs of investing in mitigation. These cost reductions can be designed to favor club members only. Unlike trade-related policies intended to favor club members, R&D and climate-finance policies do not have negative “side effects” for member countries. Indeed, they have positive co-benefits in addition to the primary environmental benefits — a “double dividend” for club members, and a single dividend (GHG emission reduction) for the world.

Suggested Citation

Carraro, Carlo, Clubs, R&D, and Climate Finance: Incentives for Ambitious GHG Emission Reductions (September 21, 2017). FEEM Policy Brief No. 01.2017, Available at SSRN: https://ssrn.com/abstract=3040541

Carlo Carraro (Contact Author)

Ca' Foscari University of Venice ( email )

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