Benefit-Cost Analysis for Climate Action
Bibliographic Data
| ID | 13037339 |
|---|---|
| Authors | Dominique Bureau (0000-0001-8184-9732, French National Agency for Water and Aquatic Environments), Alain Quinet (Laboratoire de Mesure du Carbone 14), Katheline Schubert (Paris School of Economics, corresponding author) |
| Year | 2021 |
| Volume | 12 |
| Issue | 3 |
| Pages | 494-517 |
| Publication date | 2021-01-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Benefit-Cost Analysis (JOURNAL) |
| Journal identifiers | ISSN: 2152-2812 • E-ISSN: 2194-5888 |
| Publisher | Cambridge University Press (CUP) (PUBLISHER) |
| DOI | 10.1017/bca.2021.11 |
| OpenAlex | W3217162604 |
| Language | EN |
| Citations received | 1 |
| References cited | 21 |
Although a carbon value has often been integrated in the frameworks established to guide public decision-making, benefit-cost analysis (BCA) has played no more than a minor role in the design of climate policies. It is urgently necessary to promote BCA in this area, and there is currently a unique opportunity for doing so. Major countries are designing new packages in order to meet their commitments, as illustrated by the European Green Deal, recent decisions on the part of the Biden Administration, and the creation of a Chinese national carbon market. These constructive processes must be based on BCA. BCA is absolutely necessary in order to achieve net-zero emissions by 2050 at a reasonable cost. Indeed, abatement costs across and within sectors, and across and within countries, are extremely heterogeneous, and many of the policy instruments in use (subsidies, feed-in tariffs, technical standards, etc.) overlap inefficiently. The instrumental debate between carbon pricing and other instruments is sterile if it merely remains at the level of stating principles. BCA can help on this point too, by specifying comparisons between alternatives, identifying complementarities, and selecting the most relevant combinations of instruments. Its scope should therefore range from setting benchmarks for carbon pricing to assessing, e.g., green investments or measures to enhance carbon sinks. When applied to decarbonization policies, BCA requires firstly the selection of a carbon value, in order to monetize the climate benefits of investments and policies. However, the whole assessment framework must be updated, including the time horizon, the discount rate, the cobenefits of climate mitigation actions, and the pricing of climate risks. We show that such an updated framework leads to an upward revision in the assessment of the climate benefits of mitigation actions, and that combining the valuation of damages and cost-effectiveness approaches is necessary in order to meet the needs of policy assessment. Finally, there is a need to extend analysis beyond the efficiency criterion in order to deal with other dimensions of climate policies, particularly their distributive impacts. This requires specific analyses, which should be articulated with BCA and carried out at an early stage for a better implementation of climate policies than we have seen to date
Business · Carbon price · Cost–benefit analysis · Economics · Environmental economics · Greenhouse gas · Natural resource economics · Order (exchange · Scope (computer science · Subsidy · Time horizon · Value (mathematics · Climate Change Policy and Economics · Computer Science · Energy, Environment, and Transportation Policies · Fiscal Policy and Economic Growth · Finance
Inequality, climate impacts on the future poor, and carbon prices
Fat-Tailed Uncertainty in the Economics of Catastrophic Climate Change
Accounting for the Distribution of Benefits and Costs in Benefit–Cost Analysis
Cost–Benefit Assessment of Public Investments in France
Introduction to a special issue entitled Perspectives on Implementing Benefit-Cost Analysis in Climate Assessment
Endogenous Growth, Convexity of Damage and Climate Risk
Quantifying Economic Damages from Climate Change
The Cost of Reducing Greenhouse Gas Emissions
| Citations per year | 0.5 |
|---|---|
| Citation span | 2024 - 2024 (1) |
| Highly cited | No |