Climate Policies with Burden Sharing: The Economics of Climate Financing

Proceedings of the 2nd Social and Sustainable Finance and Impact Investing Conference, University of Cambridge, September 25, 2017. In K. John, A.K. Makhija , St.P. Ferris (Eds.) International Corporate Governance and Regulation, Advances in Financial Economics, 20, 1-13.

21 Pages Posted: 27 Feb 2017 Last revised: 15 Jan 2019

See all articles by Julia M. Puaschunder

Julia M. Puaschunder

Harvard University; The New School for Social Research; Columbia University; Princeton University; George Washington University Center for International Business Education and Research; The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA)

Date Written: February 24, 2017

Abstract

The maintenance of a favorable climate accounts for the most challenging contemporary global governance predicament that seems to pit today’s generation against future world inhabitants. In a trade-off of economic growth versus sustainability, a broad-based international coalition could establish climate justice. As a novel angle towards climate justice, the following paper proposes (1) a well-balanced climate mitigation and adaptation public policy mix guided by micro- and macroeconomic analysis results, and (2) a new way of funding climate change mitigation and adaptation policies through carbon tax and broad-based climate bonds that also involve future generations. Contemporary climate financing strategies (e.g., Sachs Model) are thereby added into Integrated Assessment Models of the Nordhaus Type. Overall, the paper strives to delve deeper into a discussion of how market economies can be brought to a path consistent with prosperity and sustainability. Finding innovative ways how to finance climate abatement over time coupled with future risk prevention as well as adaptation to higher temperatures appears as an innovative and easily-implementable solution to nudge overlapping generations towards climate justice in the sustainability domain.

Keywords: Climate bonds, Climate change, Climate change adaptation and mitigation, Climate justice, Intergenerational burden sharing, Intertemporal discounting, Nonlinear model predictive control, Social discounting alternatives, Public policy

Suggested Citation

Puaschunder, Julia M., Climate Policies with Burden Sharing: The Economics of Climate Financing (February 24, 2017). Proceedings of the 2nd Social and Sustainable Finance and Impact Investing Conference, University of Cambridge, September 25, 2017. In K. John, A.K. Makhija , St.P. Ferris (Eds.) International Corporate Governance and Regulation, Advances in Financial Economics, 20, 1-13.. Available at SSRN: https://ssrn.com/abstract=2923475 or http://dx.doi.org/10.2139/ssrn.2923475

Julia M. Puaschunder (Contact Author)

Harvard University ( email )

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The New School for Social Research ( email )

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Columbia University ( email )

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Princeton University ( email )

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George Washington University Center for International Business Education and Research ( email )

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The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA) ( email )

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New York, NY 10027
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