OECD Economics Department Working Papers
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
The Economics of Climate Change Mitigation
Policies and Options for the Future
Considering the costs and risks of inaction, ambitious action to reduce greenhouse gas emissions is
economically rational. However, success in abating world emissions will ultimately require a least-cost set
of policy instruments that is applied as widely as possible across all emission sources (countries, sectors
and greenhouse gases). The main purpose of this paper is to explore feasible ways to meet these two basic
requirements for successful future climate policies. Using a range of modelling frameworks, it analyses
cost-effective policy mixes to reduce emissions, the implications of incomplete coverage of policies for the
costs of mitigation action and carbon leakage, the role of technology-support policies in lowering future
emissions and policy costs, as well as the incentives –and possible options to enhance them – for emitting
countries to take action against climate change.
Keywords: co-benefits, burden sharing, carbon leakage, climate change, energy R&D, climate policy
JEL:
H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies;
H41: Public Economics / Publicly Provided Goods / Public Goods;
O13: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products;
Q43: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Energy and the Macroeconomy;
Q32: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Nonrenewable Resources and Conservation / Exhaustible Resources and Economic Development;
Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming;
O3: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights
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