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Updated: Jun 23, 2025
06:10
Using Generative Art to Convey Past and Future Climate Transitions
Published on: March 31, 2023
938
Optimal Climate Policy and the Future of World Economic Development.
Mark Budolfson1, Francis Dennig2, Marc Fleurbaey3
1Philosophy Department at the University of Vermont.
The World Bank Economic Review
|June 17, 2024
Summary
Present generations may need to make greater sacrifices to combat climate change. Optimistic economic models underestimate future population growth and productivity in developing nations, suggesting higher near-term carbon taxes are optimal.
Area of Science:
- Climate economics
- Environmental policy
- Development economics
Background:
- Debate on climate economics focuses on ethical parameters like social time preference and inequality aversion.
- Current models may overestimate future economic convergence and underestimate population growth in developing countries.
Purpose of the Study:
- To investigate how future developing world scenarios impact optimal climate policy.
- To reassess the 'ethical parameters' in climate economics by incorporating revised development predictions.
Main Methods:
- Modification of a standard climate economics model.
- Inclusion of plausible scenarios for high future population growth (particularly in sub-Saharan Africa).
- Inclusion of scenarios for low future total factor productivity (TFP) convergence.
Main Results:
- Under revised scenarios, optimal near-term carbon taxes could be substantially larger.
- Leading climate economics models may be too optimistic regarding future global poverty reduction and economic improvements.
Conclusions:
- Optimal climate policy is significantly influenced by the future trajectory of the developing world.
- Revised assumptions on population growth and TFP convergence necessitate higher immediate carbon taxes for effective climate change mitigation.
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