Template-Type: ReDIF-Article 1.0
Author-Name:  Thierry Brechet and Henry Tulkens
Title:  Climate Policies: A Burden, or a Gain?
Classification-JEL: F0
Volume:  Volume 36
Issue:  Number 3
Year:  2015
Abstract:  That climate policies are costly is evident and therefore often create major fears. But the alternative (no action) also has a cost. Therefore, mitigation costs netted of the damage costs avoided are the only figure that can seriously be considered as the "genuine cost" of a policy. We elaborate on this view of a policy's cost by distinguishing between its "direct" cost component and its avoided damage cost component; we then confront the two so as to evaluate its genuine cost. As damages avoided are equivalent to the benefits generated, this brings climate policies naturally in the realm of benefit-cost analysis. However, the sheer benefit-cost criterion may not be a sufficient incentive for a country to be induced to cooperate internationally, a necessary condition for an effective global climate policy. We therefore also explore how to make use of this criterion in the context of international climate cooperation. 
Handle: RePEc:aen:journl:ej36-3-Brechet
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