The role of economics in climate change Policy

. The role of economics in climate change Policy instruments and long-term economic development Fredrik Hedenus hedenus@fy. chalmers. se Physical Resource Theory Chalmers University of Technology Fredrik Hedenus Physical Resource Theory

Long term climate targets Fredrik Hedenus Physical Resource Theory

Emissions (ton carbon per capita) 6. 00 USA 5. 00 Canada, Australia, New Zealand 4. 00 Russia Japan OECD Europe Other EIT Middle East China Latin America Other Asia. Africa 3. 00 2. 00 1. 00 India 0 1, 000 2, 000 3, 000 4, 000 5, 000 6, 000 Population (million) Fredrik Hedenus Physical Resource Theory

Strategies to reduce atmospheric carbon content n n n Reduced energy use Reduced carbon intensity in the energy supply. Biospheric carbon stock management Fredrik Hedenus Physical Resource Theory

Three legged carbon abatement policy Price signal n Technology policy n. Picking technologies from the shelf n Energy efficiency standards n n. Wind power n. Ethanol from biomass n. Conventional nuclear power n. Bringing technologies to the shelf n. Carbon capture and storage n. Solar PV n. Fuel cells Fredrik Hedenus Physical Resource Theory

Three legged climate policy Price signal n Technology policy n Energy efficiency standards n Fredrik Hedenus Physical Resource Theory

Costs of meeting stabilization target Fredrik Hedenus Physical Resource Theory

Global GDP under climate policy Source Azar & Schneider, 2002. Ecological Economics Fredrik Hedenus Physical Resource Theory

Källa: Azar et al 2003 Fredrik Hedenus Physical Resource Theory