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Systems 2018, 6(2), 10; https://doi.org/10.3390/systems6020010

Efficient and Equitable Climate Change Policies

1
Energy Economics Group, Laboratory for Energy Systems Analysis, PSI, 5232 Villigen PSI, Switzerland
2
MaREI Centre, Environmental Research Institute, University College Cork, Lee Road, T23 XE10 Cork, Ireland
3
School of Engineering, University College Cork, College Road, K8AF Cork T12, Ireland
4
IEA-ETSAP Project Head, 22B Vernardou Str, 15235 Vrilissia, Greece
*
Author to whom correspondence should be addressed.
Received: 21 March 2018 / Revised: 5 April 2018 / Accepted: 8 April 2018 / Published: 13 April 2018
(This article belongs to the Special Issue Modelling of Economic Systems)
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Abstract

This report describes the Integrated Assessment Model TIAM-MACRO, which is a Ramsey-type macroeconomic growth model linked with a technology-rich engineering model of the energy-system and with a stylized sub-model of climate change. TIAM-MACRO contributes to coherent and consistent policy analyses at both the world and regional level and correlates demand for energy services to macro-economic developments across regions and time until the end of the 21st century. With the help of this model, two contrasting scenarios are defined related to the reference development (BASE) case and the 2 °C (2DS) case that follow long-term policies on climatic change mitigation in the spirit of the Paris agreement. Finally, we define ex-post market and non-market damages together with the damages related to Local Atmospheric Pollutants (LAP). The stringency of the 2DS case requires the complete restructuring of the energy and transport systems to be relying on carbon-free technologies and fuels together with technologies of negative emissions, at high costs. The study concludes that carbon policies not only consist of an insurance against the risk of climate change but also improve the ambient air quality, as they have secondary benefits that compensate for part of the cost of carbon control. However, the stringency of the 2DS case is so demanding that the cost of climate policies is above benefits. View Full-Text
Keywords: cost/benefit; second best analysis; energy and climate change; integration of LAP externalities; climate damages; burden sharing cost/benefit; second best analysis; energy and climate change; integration of LAP externalities; climate damages; burden sharing
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
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Kypreos, S.; Glynn, J.; Panos, E.; Giannakidis, G.; Ó Gallachóir, B. Efficient and Equitable Climate Change Policies. Systems 2018, 6, 10.

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