Evaluating the economic costs of decarbonization under political economy constraints

Climate economics

Evaluating the economic costs of decarbonization under political economy constraints

Project goal

Policymakers often cite political economy constraints – usually confined to a few economic sectors – as a reason to delay necessary efforts to decarbonize their economies. This raises the question: what are the economic costs of delayed action in decarbonizing? We evaluate the economic costs of delaying efforts to decarbonize across four policy scenarios:

  1. No delay (the optimal policy)
  2. Delaying decarbonization in a set of politically challenged sectors
  3. Delaying any action in a set of politically challenged sectors
  4. Delaying all action in every economic sector From this analysis, we hope to inform policymakers as to the costs and benefits of delay in decarbonizing, particularly when political economy constraints are present that make decarbonizing certain sectors difficult.

I am very pleased to have been hired as a short-term consultant at the World Bank Climate Change Group while this work is being completed!

Collaborators

Florent John McIsaac and Stephane Hallegatte.