Climate policies: a burden, or a gain?
(2015) The Energy Journal — Vol. 36, n° 3, p. 155-170 (2015)
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- Abstract
- That climate policies are costly is evident and therefore often create major fears. But the alternative (no action) also has a cost. Therefore, mitigation costs netted of the damage costs avoided are the only figure that can seriously be considered as the “genuine cost” of a policy. We elaborate on this view of a policy’s cost by distinguishing between its “direct” cost component and its avoided damage cost component; we then confront the two so as to evaluate its genuine cost. As damages avoided are equivalent to the benefits generated, this brings climate policies naturally in the realm of benefit-cost analysis. However, the sheer benefit-cost criterion may not be a sufficient incentive for a country to be induced to cooperate internationally, a necessary condition for an effective global climate policy. We therefore also explore how to make use of this criterion in the context of international climate cooperation.
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Citations
Bréchet, T., & Tulkens, H. (2015). Climate policies: a burden, or a gain? The Energy Journal, 36(3), 155-170. https://hdl.handle.net/2078.5/196556 (Original work published 2015)