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GTAP Resources: Resource Display

GTAP Resource #7143

"A WTO-Compatible Climate Club that Solves the Free-Rider Problem in Global Climate Policy"
by Tarr, David G.


Abstract
The voluntary Paris Climate Agreement (and the Kyoto Protocol) has failed to halt the growth of global emissions of greenhouse gases (GHGs) since it does not address the free-rider problem in international climate agreements. Nordhaus (2015) proposes a Climate Club that addresses the free-rider problem, but the lack of a viable WTO-complaint path has impeded the Nordhaus-style Climate Club from gaining support in policy circles. We propose a Climate Club in which member countries commit to net-zero emissions by 2050 with intermediate goals, impose uniform penalty tariffs on imports of non-members, high tariffs on carbon-intensive products of non-members and progressive tariffs on members who do not meet intermediate targets. We propose an institutional structure similar to the Montreal Protocol including that rich country members voluntarily contribute to a Multilateral Fund for developing country members with low per capita emissions. This Climate Club meets the conditions of successful cooperative agreements on common resources since it contains reciprocal commitments and has penalties for non-compliance. Importantly, it is WTO compliant under the GATT Exception clause for the conservation of exhaustible natural resources and it can be implemented immediately.

To achieve net-zero emissions by 2050, model estimates indicate the world needs both rapid technological advance to lower the costs of clean energy as well as an effective Climate Club. We propose that all high-income countries devote 0.20 percent of their GDP to technologies that lower the relative price of green energy.





Resource Details (Export Citation) GTAP Keywords
Category: 2024 Conference Paper
Status: Not published
By/In: Presented during the 27th Annual Conference on Global Economic Analysis (Fort Collins, Colorado, USA)
Date: 2024
Version: 1
Created: Tarr, D. (4/3/2024)
Updated: Tarr, D. (5/10/2024)
Visits: 60
- Climate change policy
- Climate impacts
- Environmental policies
- Renewable energy
- Sustainable development
- Trade and the environment
- Multilateral trade negotiations
- Not Applicable


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