Summary
This economic modelling study compares three mechanisms for raising public climate finance in developed countries—CO2 emissions pricing, electricity consumption tax, and fossil fuel subsidy removal—using computable general equilibrium analysis. The findings reveal substantially different global costs, distributional impacts on developing countries, and carbon leakage effects across the three approaches. Fossil fuel subsidy removal emerges as least globally cost-effective but most equitable and incentivising for decarbonisation in developing economies.
UK applicability
As a high-income developed country, the United Kingdom would be a potential source of climate finance under the mechanisms modelled. The findings are relevant to UK policy deliberation on climate finance contributions and their domestic economic and emissions trade-offs, though the abstract does not isolate UK-specific results.
Key measures
Global costs of raising climate funds; cost incidence between developed and developing countries; global CO2 emission impacts; carbon leakage; welfare impacts
Outcomes reported
The study modelled economic costs and CO2 emission impacts of three public finance-raising mechanisms (CO2 pricing, electricity tax, fossil fuel subsidy removal) using computable general equilibrium analysis. It assessed differential cost burden distribution between developed and developing countries and global carbon leakage effects.
Topic tags
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