Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171609
Authors: 
Bretschger, Lucas
Suphaphiphat, Nujin
Year of Publication: 
2012
Series/Report no.: 
Economics Working Paper Series 12/166
Abstract: 
The paper develops a two-region endogenous growth model with climate change affecting the countries' capital stocks negatively. We compare two different policies aimed at supporting less developed countries: climate mitigation by rich countries, which diminishes the increase in stock pollution and hence capital depreciation, and income transfers in the tradition of development aid. Under a mild set of assumptions we find that active climate policies are more efficient for rich economies and also, remarkably, better for poor countries than additional development aid. The main reason is the difference between the two policies with respect to their effects on economic growth. The results are robust with respect to possible model extensions.
Subjects: 
Climate policy
development aid
endogenous growth
stock pollution
JEL: 
O10
Q52
Q54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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