OECD Development Centre Working Papers

The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.

English, French

Climate Policy Without Tears

CGE-Based Ancillary Benefits Estimates for Chile

What interest do developing countries have in limiting the growth of their greenhouse gas (GHG) emissions? Answering this question is crucial to moving international climate policy negotiations forward. The primary benefits for individual countries of GHG abatement remain highly uncertain and, in any case, long-term in nature. The costs, on the other hand, are near-term.

Using an economy-wide model of Chile, this study examines a hitherto neglected set of benefits from climate policy, viz., the reduction in emissions of local and regional air pollutants and the “ancillary” health benefits, in this case for the people of Santiago, the capital city. These benefits are both near-term and readily captured by the country implementing the policy. Extensive sensitivity analysis is performed in recognition of the uncertainty surrounding certain key parameter and exogenous variable values — notably, Santiago residents’ willingness to pay (WTP) for reduced mortality and morbidity risk, and ...


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