Article Type
Research Article
Publication Title
World Bank Economic Review
Abstract
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.
First Page
21
Last Page
40
DOI
10.1093/wber/lhx016
Publication Date
2-1-2019
Recommended Citation
Budolfson, Mark; Dennig, Francis; Fleurbaey, Marc; Scovronick, Noah; Siebert, Asher; Spears, Dean; and Wagner, Fabian, "Optimal Climate Policy and the Future of World Economic Development" (2019). Journal Articles. 954.
https://digitalcommons.isical.ac.in/journal-articles/954
Included in
Behavioral Economics Commons, Environmental Studies Commons, Growth and Development Commons, Regional Economics Commons
Comments
Open Access, Green