Analyzing Trade-offs in International Climate Policy Options: The Case of the Green Climate Fund. (October 2015) - Markandya, A.
Highlights: The Green Climate Fund (GCF) has been assessed in a dynamic CGE model. Different distributive criteria for allocating funds through the GCF among developing countries are compared. Alternative investment pathways of GCF are compared. Impacts of investing GCF in energy efficiency and renewable energy are explored. GCF could ensure substantial gains fostering growth in developing countries. Summary: We investigate the trade-offs between economic growth and low carbon targets for developing and developed countries in the period up to 2035. Policy options are evaluated with an original version of the dynamic CGE model GDynE. Abatement costs appear to be strongly detrimental to economic growth for developing countries. We investigate options for reducing these costs that are consistent with the current negotiations. We show that the Green Climate Fund financed through a levy on carbon taxation can benefit all parties, and large benefits are associated with investment of the Green Climate Fund to foster energy efficiency in developing countries.