TY - BOOK ID - 136723298 TI - Can International Technological Diffusion Substitute for Coordinated Global Policies to Mitigate Climate Change? PY - 2021 SN - 1513594052 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - China, People's Republic of KW - Macroeconomics KW - Economics: General KW - Taxation KW - Environmental Policy KW - Environmental Conservation and Protection KW - Environmental Economics KW - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General KW - International Policy Coordination and Transmission KW - Climate KW - Natural Disasters and Their Management KW - Global Warming KW - Taxation and Subsidies: Externalities KW - Redistributive Effects KW - Environmental Taxes and Subsidies KW - Environmental Economics: Government Policy KW - Externalities KW - Business Taxes and Subsidies KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Public finance & taxation KW - Climate change KW - Environmental policy & protocols KW - Excise taxes KW - Carbon tax KW - Taxes KW - Climate policy KW - Environment KW - Greenhouse gas emissions KW - Spillovers KW - Financial sector policy and analysis KW - Currency crises KW - Informal sector KW - Economics KW - Environmental impact charges KW - Climatic changes KW - Environmental policy KW - Greenhouse gases KW - International finance UR - https://www.unicat.be/uniCat?func=search&query=sysid:136723298 AB - 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. But when innovation can diffuse overseas, long-run temperature increases are limited to 3 degrees. This occurs because policy not only encourages green innovations but also dissuades dirty innovations which would otherwise spread. The most effective policy package in emissions-reducing regions is a research subsidy funded by a carbon tax, driven in the short term by the direct effect of the carbon tax on the composition of energy, and later by innovation induced by research subsidies. Green production subsidies are ineffective because they undermine incentives for innovation. ER -