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GTAP Resource #5522

"The Paris agreement without US Lessons from an integrated assessment exercise in a second best modeling framework "
by Hamdi-Cherif, Meriem

In the lead up to the historical Paris Agreement, all the UNFCC signatory countries have published their post-2020 voluntary climate targets, the so-called Intended Nationally Determined Contributions (INDCs). One year after the COP21, the Paris Agreement entered into force with the ratification, among others, of the climate leaders and big emitters that are the United States, China and European Union. Unfortunately, this positive atmosphere regarding the fight of climate change has been shaken by the election of Donald Trump who stated the withdrawal of the US on June 2017. Based on this political context, this paper investigates some macroeconomic pictures of a “climate world” without the US participation. We have designed scenarios where two leaders in the climate negotiations, China and the EU, compensate for the US withdrawal from the Paris Agreement through increased abatement efforts. We have also explored the possibility of imposing sanctions against the US through the implementation of border carbon adjustments. The analysis of economic interactions is conducted using IMACLIM-R, a hybrid multi-region, multi-sector general equilibrium model which embarks sectoral expertise into a macroeconomic framework to assess CO2 emissions scenarios and policies.
This quantitative assessment demonstrates that compensating scenarios are hardly acceptable for the countries who compensate the global emission gap due the US withdrawal from its NDC commitments. It also shows that a global coalition sanctioning the US through carbon tariffs is costlier for the US than its participation to the Paris Agreement, while it makes the macroeconomic situation better at the global level, and also for China and the EU.

Resource Details (Export Citation) GTAP Keywords
Category: 2018 Conference Paper
Status: Published
By/In: Presented at the 21st Annual Conference on Global Economic Analysis, Cartagena, Colombia
Date: 2018
Created: Hamdi-Cherif, M. (4/13/2018)
Updated: Hamdi-Cherif, M. (4/13/2018)
Visits: 799
- Dynamic modeling
- Climate change policy
- Trade and the environment
- Multilateral trade negotiations
- Not Applicable

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