Climate clubs and the macro-economic benefits of international cooperation on climate policy

Article - September 6, 2021

The Paris agreement has provided a new framework for climate policy. Complementary forms of international collaboration, such as climate clubs, are probably necessary to foster and mainstream the process of gradual and voluntary increase in nationally determined contributions.

In this study we provide a quantitative macro-economic assessment of the costs and benefits that would be associated under different climate club architectures. We find that the key benefits that could structure the club are enhanced technological diffusion and the provision of low-cost climate finance, which reduce investment costs and also enables developing countries to take full advantage of technological diffusion.

Read the full study here.