{
  "title": "Can International Technological Diffusion Substitute for Coordinated Global Policies to Mitigate Climate Change?",
  "publication": "IMF Working Papers, June 25, 2021",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2021/06/25/can-international-technological-diffusion-substitute-for-coordinated-global-policies-to-460902",
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  "summary": "In short, yes. I use a multi-region integrated assessment model with fuel-specific endogenous technical change to examine the impact of Europe and China reducing emissions to zero by mid-century. Without international technological diffusion this is insufficient to avoid catastrophic climate change.",
  "sections": [
    {
      "heading": "Executive summary and key finding",
      "content": "- Main conclusion: International technological diffusion can substitute for coordinated global policies to mitigate climate change — \"In short, yes.\"\n- Model used: multi-region integrated assessment model with fuel-specific endogenous technical change.\n- Core scenario outcome: When innovation can diffuse overseas, long-run temperature increases are limited to 3 degrees.\n- Counterfactual: Without international technological diffusion, Europe and China reducing emissions to zero by mid-century is insufficient to avoid catastrophic climate change.\n- Mechanism: Policy in emissions-reducing regions both encourages green innovations and dissuades dirty innovations that would otherwise spread."
    },
    {
      "heading": "Model setup and scenarios",
      "content": "- Geographic focus: Europe and China reducing emissions to zero by mid-century.\n- Key model feature: fuel-specific endogenous technical change.\n- Diffusion scenarios:\n  - No international technological diffusion: insufficient mitigation; catastrophic climate change implied.\n  - With international technological diffusion: long-run temperature increases limited to 3 degrees."
    },
    {
      "heading": "Policy packages and effectiveness",
      "content": "- Most effective package in emissions-reducing regions:\n  - Research subsidy funded by a carbon tax.\n  - Short-term effect: carbon tax directly alters the composition of energy.\n  - Longer-term effect: research subsidies induce innovation that further reduces emissions.\n- Ineffective policy:\n  - Green production subsidies are ineffective because they undermine incentives for innovation."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subjects: Carbon tax, Climate policy, Environment, Financial sector policy and analysis, Greenhouse gas emissions, Spillovers, Taxes.\n- Keywords: Carbon tax, Climate policy, energy-producing firm, Europe, Global, green production subsidy, Greenhouse gas emissions, package in emissions-reducing region, policy package, research subsidy, Spillovers.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2021/06/25/can-international-technological-diffusion-substitute-for-coordinated-global-policies-to-460902"
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    "Authors: Philip Barrett",
    "Published: June 25, 2021",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513585765.001",
    "Main conclusion: International technological diffusion can substitute for coordinated global policies to mitigate climate change — \"In short, yes.\"",
    "Model used: multi-region integrated assessment model with fuel-specific endogenous technical change.",
    "Core scenario outcome: When innovation can diffuse overseas, long-run temperature increases are limited to 3 degrees.",
    "Counterfactual: Without international technological diffusion, Europe and China reducing emissions to zero by mid-century is insufficient to avoid catastrophic climate change.",
    "Mechanism: Policy in emissions-reducing regions both encourages green innovations and dissuades dirty innovations that would otherwise spread.",
    "Geographic focus: Europe and China reducing emissions to zero by mid-century.",
    "Key model feature: fuel-specific endogenous technical change.",
    "Diffusion scenarios:",
    "Most effective package in emissions-reducing regions:",
    "Ineffective policy:",
    "Subjects: Carbon tax, Climate policy, Environment, Financial sector policy and analysis, Greenhouse gas emissions, Spillovers, Taxes.",
    "Keywords: Carbon tax, Climate policy, energy-producing firm, Europe, Global, green production subsidy, Greenhouse gas emissions, package in emissions-reducing region, policy package, research subsidy, Spillovers.",
    "**Working Paper**"
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