Climate Policy and the Growth Pattern of Nations
September 2011 until August 2014
318.799 € funded by BMBF, PT DLR: Ökonomie des Klimawandels
Ottmar Edenhofer
PIK number / OEH

Does climate policy hinder economic growth? The literature on climate economics provides indication that climate stabilization goals can be achieved with moderate GDP losses, but this depends on a number of assumptions, e.g. universal climate policy regimes and world-wide availability of low-cost carbon free technologies. Technological progress and technology diffusion play a crucial role. Still it is unclear whether technological progress and climate policy-induced technology diffusion support convergence or divergence of economic growth in different world regions.

The first aim of our research project is to contribute to a better qualitative and quantitative understanding of the interconnected mechanisms of climate policy, trade, endogenous international technology diffusion, economic development, cross-country convergence and carbon leakage. The second aim is to examine the economic and environmental effectiveness of climate, trade and technology-related policy instruments in tackling climate change under different growth scenarios, which has been neglected so far in the literature.

The project will be coordinated by the Potsdam Institute for Climate Impact Re-search (PIK). PIK will lead the work package on numerical assessments and is respon-sible for creating a project website and organizing the final symposium where the pro-ject results will be presented to the scientific community and to stakeholders.