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The socio-political processes that influence the acceptance of climate policies play a crucial role in shaping mitigation strategies. In this paper, we explore the interplay between social and political dynamics and their impact on climate policy support. Using a simplified model of the social and political system, we aim to uncover ways to enhance public support for climate change mitigation measures. Several factors come into play when considering policy support, including social norms, self-efficacy, social learning, and income. By examining climate mitigation policies and accounting for shifting and inherent preferences, we shed light on how individuals contribute to processes of social change. Through simulations, we find that even minimal peer pressure has a positive and significant impact on individuals' inclination towards green behaviours, regardless of whether regressive or progressive policies are implemented. Additionally, assuming uniform self-efficacy across society leads to an overestimation of society's acceptance of green policies. Our results highlight the importance of nurturing existing skills or developing new ones. Finally, our findings reveal that regional heterogeneity matters for climate policy acceptance. [ABSTRACT FROM AUTHOR]

This paper investigates the design of policy packages to enable carbon neutrality in the manufacturing sector by 2050, based on the case of the Netherlands. It first models potential pathways to net-zero emissions by 2050 in the Dutch manufacturing sector, and then evaluates the current policy framework's ability to catalyse the transition. The analysis shows that the Netherlands' credible commitment to raising carbon prices combined with ambitious technology support provides strong incentives for manufacturing to significantly decarbonise. However, even if the carbon levy sets an ambitious price trajectory to 2030, it is tempered by extensive preferential treatment to energy-intensive users, yielding a highly unequal carbon price across firms and sectors. Moreover, the country's technology support focuses on the cost-effective deployment of low-carbon options, which ensures least-cost decarbonisation in the short run but favours relatively mature technologies. The paper offers recommendations for policy adjustments to reach the country's carbon neutrality objective, including the gradual removal of exemptions, enhanced support for emerging technologies and greater visibility over future infrastructure plans. Other countries can learn from the Dutch experience when designing their own decarbonisation strategy for the manufacturing sector. • The Dutch policy package provides strong incentives for manufacturing to decarbonise. • Carbon pricing exemptions for energy-intensive users increase abatement costs. • Technology support favours short-term efficiency over long-term deep decarbonisation. • Dutch transition hinges on regulatory certainty and swift infrastructure deployment. • The Dutch case offers insights for other countries to design net-zero strategies. [ABSTRACT FROM AUTHOR]

This paper revisits the debate on the distributional effects of climate policies and the just transition using a broader assessment framework than that of standard welfare analysis where multidimensionality, adjustment dynamics and multiple market failures are simultaneously considered. First, the paper highlights the importance of considering the heterogeneity in the capacity and willingness to adjust along three dimensions: time, space, and preferences. Distributional effects of a standalone climate policy are regressive on income and progressive on nonpecuniary benefits, becoming more regressive in the long-run and across regions. Second, using this framework, it compares the performance of five green policy packages including an offsetting policy (rebates, environmental tax reforms, green deal plans, place-based policies, progressive green subsidies). The policy analysis suggests that the path to a just transition, while achieving the desirable economic and environmental outcomes, is narrower than previously thought. While there is no policy package emerging as preferred, green deal plans appear the most sensible option also in terms political acceptability. Finally, considering the other causality nexus, from inequality to the support of green policy packages, helps explain the low political acceptability of climate policy in general. [ABSTRACT FROM AUTHOR]

The assessment of the socio-economic and financial impacts of climate change represents a main source of uncertainty for policy makers and investors. However, traditional climate economics and financial risk models are not properly equipped to consider the characteristics of climate risks and the opportunities from climate-alignment, being constrained by equilibrium conditions and linearity of impacts, as well as by representative agents and intertemporal optimization. Given the closing window of opportunity to achieve the 2 °C target, there is an urgent need for a new wave of models able to embrace uncertainty and complexity deriving not only from climate impacts on socio-economic systems, but also from their reaction. In this regard, approaches rooted on evolutionary economics and complexity science could provide complementary insights to traditional climate economics models. This special issue contributes to fill in this knowledge gap by collecting nine papers applying evolutionary and complex systems approaches, and agent-based and network models to climate change economics, presented at the Special Session of the Research Area "Environment-Economics Interactions" of the European Association of Evolutionary Political Economy (EAEPE)'s conference 2016. By introducing conceptual and methodological innovations in climate economics and finance, the nine articles analyse the conditions for effective climate policies and financial instruments to align countries to the global climate targets, compared to the costs of inaction. This information is crucial to support decision-makers in the analysis of climate-finance policies and instruments to foster the transition to a sustainable and inclusive low-carbon economy. [ABSTRACT FROM AUTHOR]

The role of technology transfer in the mitigation of climate change has been strongly emphasized in the recent policy debate. This paper offers a network-based perspective on the issue. First, we propose a methodology to infer from technology adoption data the network of diffusion and apply it to a detailed dataset on wind energy technologies installed globally since the 1980s. We then perform a statistical analysis of the network. It highlights a relatively inefficient organization, characterized in particular by the weakness of South-South links, which leads to relatively long lags in the diffusion process. Against this background, we characterize optimal transfer/seeding strategies for an agent that aims to introduce a new technology in a developing country in view of further diffusion. Our results suggest in particular that CDM projects have been too concentrated in large emerging economies and that developed countries should put a stronger weight on the positive externalities in terms of technology transfer of cooperating with less prominent developing countries. [ABSTRACT FROM AUTHOR]

Ambitious climate policy increases the cost of energy and therefore has important interactions with the prospects of development in the countries of Sub-Saharan Africa. These interactions include the potential for gain for the continent in the form of new trade opportunities and climate finance. In this paper we quantify the costs and benefits of climate policy in Sub-Saharan Africa. Using an Integrated Assessment Model, we consider key characteristics of the continent, including the favorable conditions for renewable energy. A newly designed scenario analysis allows identifying the main drivers of the results. We show that Sub-Saharan Africa could implement climate policy in line with the 2 °C target at roughly net zero costs if the international community follows up on its commitment towards supporting developing countries as declared in the Paris Agreement. Sub-Saharan Africa could become an important supplier of energy from biomass and could thus even benefit from more ambitious climate policy due to higher demand for this source of energy. The absence of a painful trade-off between short-term development and long-term climate stabilization could provide policy-makers with a much richer policy option space than previously considered. One such option is to link climate policy with poverty reduction through, for example, the provision of clean electricity. [ABSTRACT FROM AUTHOR]

Climate change is one of the most daunting challenges human kind has ever faced. In the paper, we provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) diffusion of climate-friendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks. [ABSTRACT FROM AUTHOR]

Progressively adjusting climate policies will entail adjustment costs for society. This paper develops a conceptual model and numerical example that illustrate the risk associated with exposure to the high costs of complying with future emissions controls and how this risks trades off against that from potentially premature investment into abatement. We then highlight the potentially unique role of tropical forest protection in helping to manage these risks by providing a cost-effective “buffer” of near term emissions reductions at a globally significant scale. This buffer would provide insurance against the risk of suddenly tightening targets, as well as providing other critical environmental benefits. We further examine how a version of a private finance instrument in the form of long-dated ‘call’ options on verified reductions in emissions from deforestation and forest degradation (i.e. REDD +) can help to operationalize this risk-hedging buffer creation. Options on REDD + could aid both regulated businesses and tropical nations to manage their respective risks. REDD + options could deliver sufficient abatement to significantly hedge exposure of regulated entities to potential corrections in climate policy while channeling financial resources to defer deforestation even as climate policies continue to evolve. [ABSTRACT FROM AUTHOR]

The literature on metrics to measure contributions to climate change from emissions of different greenhouse gases divides into studies that highlight physical aspects and studies that show the importance of economic factors. This paper distinguishes the physical aspects and implications of economic factors by asking what is demanded from physically based metrics if used for a specific policy objective. We study the aim of maximizing the welfare of emissions generated by consumption when there is a limit to the increase in global mean temperature. In that case, metrics ought to change over time, with increasing weight on short-living gases before the temperature limit is met. Metrics for short-living gases increase also with increasing uncertainty. Adjustments to new information spur higher metrics for short-living gases if it reduces the expected allowable emissions before the target is met, and lower metrics in the opposite case. Under a binding target, metrics refer to the instantaneous impact on radiative forcing multiplied by the lifetime of the respective gases, and adjusted by the attitude to risk. [ABSTRACT FROM AUTHOR]

• French people have limited knowledge about climate change but worry about it. • They prefer green investments or regulations to a tax and dividend. • Distributive effects and lack of alternatives prevent carbon tax acceptance. • Improving knowledge is predicted to increase ecological attitudes and concern. • Unlike in the US, partisanship does not interact with education to shape perceptions. This paper aims to assess the prospects for French climate policies after the Yellow Vests crisis halted the planned increase in the carbon tax. From a large representative survey, we elicit knowledge, perceptions and values over climate change, we examine opinions relative to carbon taxation, and we assess support for other climate policies. Specific attention is given to the link between perceptions of climate change and attitudes towards policies. The paper also studies in detail the determinants of attitudes in terms of political and socio-demographic variables. Among many results, we find limited knowledge but high concern for climate change. We also document a large rejection of the carbon tax but majority support for stricter norms and green investments, and reveal the rationales behind these preferences. Our study entails policy recommendations, such as an information campaign on climate change. Indeed, we find that climate awareness increases support for climate policies but no evidence for the formation of opinions through partisan cues as in the US, suggesting that better access to science could foster support for climate policies. [ABSTRACT FROM AUTHOR]