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CLIMATE POLICIES: CHALLENGES, OBSTACLES AND TOOLS

Published online by Cambridge University Press:  27 October 2021

Frederick van der Ploeg
Frederick van der Ploeg*
Affiliation:
Department of Economics, University of Oxford, Oxford, United Kingdom Faculty of Economics and Business, University of Amsterdam, Amsterdam, The Netherlands Centre for Economic Policy Research (CEPR), London, United Kingdom CESifo GmbH, Munich, Germany
*
*Corresponding author. Email: [email protected]
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Abstract

A four-pronged approach to climate policy is presented consisting of carbon pricing, subsidies for renewable energies, transformative green investments and climate finance and engendering flywheel effects. Then, a variety of societal and political challenges and obstacles faced by such a climate policy and what can be done to overcome them are discussed. These range from stranded assets, the very long time scales needed to adapt and deal with global warming, intergenerational conflict, international free-rider problems, carbon leakage, green paradoxes, policy failure and capture, adverse income distributional effects and spatial scarcity to the problem of climate deniers and sceptics. The paper also discusses the various tools that are needed for the analysis of both ideal and workable climate policies, and the need to collaborate with complexity scholars, political scientists, sociologists and psychologists.

Keywords

carbon pricinggreen investmentsflywheel effectsleakagegreen paradoxesincome distributionpolitical economyH23Q54
Type
Research Article
Information
National Institute Economic Review , Volume 258: MACROECONOMICS OF CLIMATE CHANGE , Autumn 2021 , pp. 12 - 27
Copyright
© The Author(s), 2021. Published by Cambridge University Press on behalf of National Institute Economic Review

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