ESPAGNE Etienne

The goal of this paper is to analyze the complex institutional landscape of adaptation finance in Vietnam, a middle-income country highly vulnerable to the impact of climate change. While resources from international organizations and national authorities occupy a prominent position in adaptation funding, the use of local resources that directly or indirectly support adaptation practices is also an important factor to consider. We hypothesize that it is that interplay between official climate change finance on the one hand and local social dynamics on the other hand that shapes the structure of adaptation funding. These very particular financing circuits consequently determine the kind of adaptation actions that are actually implemented. The paper unfolds the adaptation finance flows at all scales by using qualitative field studies, technical and legal reports, and a wide-ranging literature on adaptation project financing, and thus identifies three types of dialectical tensions that might hinder Vietnamese institutional readiness for adaptation finance: the adaptation/development financing nexus, the adaptation/reaction financing behaviors, and the endogenous/exogenous financing dichotomy. Ultimately, the paper derives from these dialectical tensions within the architecture and functioning of adaptation finance key takeaway messages for a prospective analysis of adaptation funding that better informs adaptation finance policies.

The back cover states: "The nerve center of capitalism is finance, whose raison d'être is to make money with money. Regularly shaken by crises, it poses a threat of instability to our societies. Above all, this capitalism is responsible for the explosion of social inequalities and the destruction of the planet's resources and climate, major ruptures that endanger the survival of future generations. The challenge of this book is to show that we can "civilize capitalism". By reintegrating the economy into social relations and restoring the commons, we can put capitalism back on the path to inclusive and sustainable growth. This book lays the conceptual foundations for this transformation, which requires participatory democracy in order to articulate social justice and political ecology. A fundamental book to think differently and in the long term about the relationship between finance, growth and climate".

No summary available.

No summary available.

No summary available.

The aim of this study is to examine farm household-level impacts of weather extreme events on Vietnamese rice technical efficiency. Vietnam is considered among the most vulnerable countries to climate change, and the Vietnamese economy is highly dependent on rice production that is strongly affected by climate change. A stochastic frontier analysis is applied with census panel data and weather data from 2010 to 2014 to estimate these impacts while controlling for both adaptation strategy and household characteristics. Also, this study combines these estimated marginal effects with future climate scenarios (Representative Concentration Pathways 4.5 and 8.5) to project the potential impact of hot temperatures in 2050 on rice technical efficiency. We find that weather shocks measured by the occurrence of floods, typhoons and droughts negatively affect technical efficiency. Also, additional days with a temperature above 31°C dampen technical efficiency and the negative effect is increasing with temperature. For instance, a one day increase in the bin [33°C-34°C] ([35°C and more]) lessen technical efficiency between 6.84 (2.82) and 8.05 (3.42) percentage points during the dry (wet) season.

No summary available.

No summary available.

This paperargues that integrated assessment models (IAMs) are useful tools to build corridors ofsocialcosts of carbon (SCC)reflecting divergent worldviews.Instead of pursuing the elusive quest for the right SCC, IAMs could indeed be useful tools to rationalize the different beliefs on climate related parameters (or worldviews) in the climate debate and help build politically coherent corridors of SCCs. We first take the example of the Stern-Nordhaus controversy as an illustration of the impossible quest for the right SCC. Disentangling the drivers of this controversy, we show that the main differences in results come from a mix of ethical choices of therepresentativeagent(puretimepreference),long-termassumptionsontechnicalparameters (abatement cost dynamics) and climate related unknowns (climate sensitivity). We then argue that these sources of disagreement can be best understood as differing worldviews rather than purescientificuncertainties. ThisimpliesthatIAMsareoflimitedhelpindetermining theright SCC,in linewithPindyck(2017).Butcontrary tohim, weconsideritnecessarytoseparatethe wheat from the chaff, and argue for a middle way between the blind confidence in IAMs’ outputs and their full rejection with respect to the SCC debate. Instead, we show how they could help rationalize the climate debates around a corridor of SCCs. We thus analyze the drivers of such corridors of values, or how the sources of divergent worldviews differently impact the SCC-abatementspacewithtime.All inall,theclimatepolicydebatearoundcarbonpricingcan benefitfromarenewedunderstandingoftheroleofIAMs,lessdivinatoryandmoreinstitutionallycentered.

No summary available.

No summary available.

No summary available.

After the Paris Agreement a fresh look is needed about the role of carbon prices in climate policies. Paragraph 136 of the Decision which notes the importance of carbon pricing, only applies to " non-party entities " and is not binding upon Parties to the Convention. Carbon prices will thus stay country-specific. This is in contrast with the idea that, in a " first-best " world, carbon prices should represent the social costs of climate change (SCC) and be equated throughout countries and sectors modulo compensating transfers for the losers. De facto, the Paris Agreement gives a pivotal role to INDCs for aligning the +2°C objective and the sustainable development goals (SDGs). Carbon prices will be one of the possible tools of their deployment but their level will be constrained by the pace at which each country can embed them into reforms of its fiscal system and its public policies. This pace will likely not be consistent with the urgency of the climate challenge and leave unsolved how to meet the Article 2 of the Agreement i.e. " making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development ». The usual response to this carbon price gap lies in complementary non price signals. But, these tools entail the risk of political arbitrariness and economic inefficiencies leading to political distrust of climate policies. The way out is to ground complements to carbon prices on the legitimacy of the paragraph 108 of the Decision of the Paris Agreement which " recognizes the social, economic, and environmental value of mitigation activities and their co-benefits to adaptation, health, and sustainable development " (hereafter SVMA).

No summary available.

No summary available.

No summary available.

No summary available.

No summary available.

The financial and environmental crisis are usually handled in different academic, expertise and public decision networks. This separation has become untenable in the age of the Anthropocene. In fact, no ambitious climate agreement can be achieved without first finding an answer to the question of how to finance the transition towards a decarbonized society. In this text, we further develop the reasons for which these two fields should be considered as a single unit. To this end, we go back to the fundamental difference between the price of carbon and the social value of carbon. The belief that the two can be equated through simple market mechanisms has been a failure. An external force is necessary to reduce the difference between the two. In the case of climate change, it takes the form of the IPCC’s results and the political commitment to keep the temperature increase below 2°C compared to its pre-industrial levels. New forms of climate policies emerge from this analysis, which now incorporate all financial actors toward this goal.

No summary available.

This paper aims at providing a consistent framework to appraise alternative modeling choices that have driven the so-called “when flexibility” controversy since the early 1990s, dealing with the optimal timing of mitigation efforts and the social cost of carbon (SCC). The literature has emphasized the critical impact of modeling structures on the optimal climate policy. We estimate within a unified framework the comparative impact of modeling structures and investigate the structural modeling drivers of differences in climate policy recommendations. We use the integrated assessment model (IAM) RESPONSE to capture a wide array of modeling choices. Specifically, we analyse four emblematic modeling choices, namely the forms of the damage function (quadratic vs. sigmoid) and the abatement cost (with or without inertia), the treatment of uncertainty, and the decision framework, deterministic or sequential, with different dates of information arrival. We define an original methodology based on an equivalence criterion to compare modeling structures, and we estimate their comparative impact on two outputs: the optimal SCC and abatement trajectories. We exhibit three key findings: (1) IAMs with a quadratic damage function are insensitive to changes of other features of the modeling structure, (2) IAMs involving a non-convex damage function entail contrasting climate strategies, (3) Precautionary behaviors can only come up in IAMs with non-convexities in damage.

No summary available.

No summary available.

This thesis approaches the economic stakes of climate negotiations from three complementary angles. More precisely, it uses three distinct frameworks to analyze the nature of the current stalemate in these negotiations, its causes and finally its possible outcomes. The first framework is that of integrated economy-climate modeling, which aggregates the key elements of the interaction between these two fields into a small number of essential functions. We thus analyze how the different hypotheses on these essential functions can reflect the positions and worldviews of the actors in the negotiation. The second framework is that of the viscosities of the real economy, which focuses on factors, sectors, and institutions as they react to the climate constraint or to the climate policies implemented. Finally, the third framework includes financial intermediation and money, as key elements in understanding the more or less energy-intensive orientation of investments, and as possible sources of a solution to the current stalemate in negotiations.

This paper discusses attempts to represent the role of R&D in the transition towards a low carbon economy through models with no meaningful granularity to inform the studied phenomenon. By means of a critical analysis of (Acemoglu et al., 2012), we show that the advantage of these models, their analytical tractability, does not make up for their disadvantages, lack of control over policy implications and questionable numerical results. On the one hand, a comprehensive analysis of the results of Acemoglu et al. (2012) shows that even research subsidies do not pave the way for ambitious climate policies with low transitory costs, thus contradicting their policy message. On the other hand, critical parameters such as the elasticity of substitution between clean and dirty technologies, carbon sinks, or the productivity of researchers are not in accordance with existing scientific knowledge. We show that using more realistic parameters leads to even more pessimistic conclusions and that their model provides no leeway for overcoming them. We suggest that a too highly aggregated model can only describe an incorporeal economy and comes to a deadlock. We propose a more promising route for economic research in order to break this deadlock.

Decision-makers have confirmed the long term objective of preventing a temperature increase greater than 2 °C. This paper aims at appraising by means of a cost-benefit analysis whether decision makers’ commitment to meet the 2 °C objective is credible or not. Within the framework of a cost-benefit type integrated assessment model, we consider that the economy faces climate damages with a threshold at 2 °C. We run the model for a broad set of scenarios accounting for the diversity of “worldviews” in the climate debate. For a significant share of scenarios we observe that it is considered optimal to exceed the threshold. Among those “non-compliers” we discriminate ”involuntary non-compliers” who cannot avoid the exceedance due to physical constraint from ”deliberate compliers” for whom the exceedance results from a deliberate costs-benefit analysis. A second result is that the later mitigation efforts begin, the more difficult it becomes to prevent the exceedance. In particular, the number of ”deliberate non-compliers” dramatically increases if mitigation efforts do not start by 2020, and the influx of involuntary non-compliers become overwhelming f efforts are delayed to 2040. In light of these results we argue that the window of opportunity for reaching the 2 °C objective with a credible chance of success is rapidly closing during the present decade. Further delay in finding a climate agreement critically undermines the credibility of the objective.