ESR 7 Costs/benefits of climate policies in the context of informal economies
Early Stage Researcher: Johann Langenbach
Research Directors: Prof. Dr. Mathilde Maurel (Centre d’Economie de la Sorbonne, University Paris 1 Panthéon Sorbonne (UP1), Centre National de Recherche Scientifique, France); Prof. Dr. Wilhelm Löwenstein (Institute of Development Research and Development Policy, Ruhr-University Bochum (RUB), Germany)
Given the increasing awareness of climate change and the growing concern about potential negative consequences of a temperature increase beyond +2°C above pre-industrial levels, countries around the globe adopted the climate agreement in Paris in 2015. In anticipation, countries published their (Intended) Nationally Determined Contributions that outlined the climate actions they intended to take post-2020. To support these actions, some countries – mostly developed – have started to implement climate policies (such as carbon pricing). Experiences from high-income countries show that climate policies (are likely to) have significant impacts on economic activity. Policymakers in developed economies can now take stock of what policies have been successful (or co-benefiting) in terms of reducing CO2 emissions, on the one hand, and economic development (economic growth, inequalities, financial stability, etc.) on the other. However, these conclusions do not apply to low-income countries, as these economies are structurally different. In SSA, informal markets represent a significant part of total economic activities. Therefore, as opposed to developed countries, simulating the ex-ante costs/benefits of different climate policies would require the modelling of informal markets in an integrated macroeconomic model together with environmental feedback. The main objective is to study the costs/benefits of well-designed climate policies in the context of developing economies characterized by significant informal markets.
Global overview of informal market structure in Sub-Saharan Africa. Simulation-based macroeconomic evaluation of implementing different climate policies in an integrated assessment model.
The project involves a strong collaboration between the Centre National de Recherche Scientifique/ Centre d’Economie de la Sorbonne at UP1 and the Institute of Development Research and Development Policy at RUB and includes mandatory research stays of the ESR in Bochum for six months in total.
Further secondments are planned at Agence Française de Développement (3 months) and as field research period (3 months) supervised by the University of Cape Town (South Africa).