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Article
MITIGATION STRATEGY FOR LESSENING THE NEGATIVE IMPACTS OF CLIMATE CHANGE
MITIGATION STRATEGY FOR LESSENING THE NEGATIVE IMPACTS OF CLIMATE CHANGE
Yongtang Liang
ABSTRACT: The solution of the planner is presented in a model in which mitigation is spent to lessen the adverse impacts imposed by climate change on productivity. In equilibrium, mitigation spending ramps up at the cost of crowding out both investment and consumption, and the probability that productivity rises to a higher level. Mitigation also generates downside protection which leads to higher social welfare. As a result, willingness-to-pay arises.
KEYWORDS: mitigation, climate change, investment, willingness to pay.
JEL classification: Q54, Q58, P46