How Much Should We Spend to Fight against Climate Change? The Value of Backstop Technologies in a Simplified Model

The estimation of the social cost of climate change is typically carried out with complex, difficult to interpret, integrated assessment models (IAMs). Instead, this paper presents a simple, tractable model with which to estimate the willingness to pay of societies against climate change. The model...

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Autores principales:	Carlos Pretel, Pedro Linares
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	climate change mitigation adaptation Technology T
Acceso en línea:	https://doaj.org/article/0b848979d32e4167bce6e2de7ca897a7
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id	oai:doaj.org-article:0b848979d32e4167bce6e2de7ca897a7
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spelling	oai:doaj.org-article:0b848979d32e4167bce6e2de7ca897a72021-11-25T17:28:43ZHow Much Should We Spend to Fight against Climate Change? The Value of Backstop Technologies in a Simplified Model10.3390/en142277811996-1073https://doaj.org/article/0b848979d32e4167bce6e2de7ca897a72021-11-01T00:00:00Zhttps://www.mdpi.com/1996-1073/14/22/7781https://doaj.org/toc/1996-1073The estimation of the social cost of climate change is typically carried out with complex, difficult to interpret, integrated assessment models (IAMs). Instead, this paper presents a simple, tractable model with which to estimate the willingness to pay of societies against climate change. The model is based on an already comprehensive and intuitive one developed by Besley and Dixit, which has been modified by including a backstop technology (e.g., a renewable energy technology). This improved formulation allows for a more realistic representation of the climate change problem in that it is able to include the decoupling of economic growth and GHG emissions. The model allows us to understand the implications of different assumptions, such as the rate of growth of the economy, or the damages expected from climate change, on the willingness to pay against it. Our results show that, for a baseline scenario, the willingness to pay (WTP) is 0.52% of annual GDP, lower than that obtained by Besley and Dixit, which shows the significant benefits of developing competitive mitigation technologies. Our results also show the benefits of international collaboration, or of devoting more resources to R&D, as efficient ways to fight against climate change.Carlos PretelPedro LinaresMDPI AGarticleclimate changemitigationadaptationTechnologyTENEnergies, Vol 14, Iss 7781, p 7781 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	climate change mitigation adaptation Technology T
spellingShingle	climate change mitigation adaptation Technology T Carlos Pretel Pedro Linares How Much Should We Spend to Fight against Climate Change? The Value of Backstop Technologies in a Simplified Model
description	The estimation of the social cost of climate change is typically carried out with complex, difficult to interpret, integrated assessment models (IAMs). Instead, this paper presents a simple, tractable model with which to estimate the willingness to pay of societies against climate change. The model is based on an already comprehensive and intuitive one developed by Besley and Dixit, which has been modified by including a backstop technology (e.g., a renewable energy technology). This improved formulation allows for a more realistic representation of the climate change problem in that it is able to include the decoupling of economic growth and GHG emissions. The model allows us to understand the implications of different assumptions, such as the rate of growth of the economy, or the damages expected from climate change, on the willingness to pay against it. Our results show that, for a baseline scenario, the willingness to pay (WTP) is 0.52% of annual GDP, lower than that obtained by Besley and Dixit, which shows the significant benefits of developing competitive mitigation technologies. Our results also show the benefits of international collaboration, or of devoting more resources to R&D, as efficient ways to fight against climate change.
format	article
author	Carlos Pretel Pedro Linares
author_facet	Carlos Pretel Pedro Linares
author_sort	Carlos Pretel
title	How Much Should We Spend to Fight against Climate Change? The Value of Backstop Technologies in a Simplified Model
title_short	How Much Should We Spend to Fight against Climate Change? The Value of Backstop Technologies in a Simplified Model
title_full	How Much Should We Spend to Fight against Climate Change? The Value of Backstop Technologies in a Simplified Model
title_fullStr	How Much Should We Spend to Fight against Climate Change? The Value of Backstop Technologies in a Simplified Model
title_full_unstemmed	How Much Should We Spend to Fight against Climate Change? The Value of Backstop Technologies in a Simplified Model
title_sort	how much should we spend to fight against climate change? the value of backstop technologies in a simplified model
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/0b848979d32e4167bce6e2de7ca897a7
work_keys_str_mv	AT carlospretel howmuchshouldwespendtofightagainstclimatechangethevalueofbackstoptechnologiesinasimplifiedmodel AT pedrolinares howmuchshouldwespendtofightagainstclimatechangethevalueofbackstoptechnologiesinasimplifiedmodel
_version_	1718412267829067776

How Much Should We Spend to Fight against Climate Change? The Value of Backstop Technologies in a Simplified Model

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