Modeling and assessing international climate financing

doi:10.1007/s11707-015-0511-x

Front. Earth Sci.

2016, Vol. 10

Issue (2) : 253-263 https://doi.org/10.1007/s11707-015-0511-x

RESEARCH ARTICLE

Modeling and assessing international climate financing

Jing WU¹,Lichun TANG²,Rayman MOHAMED³,Qianting ZHU⁴,Zheng WANG^1,^5,^*(

)

1. Institute of Policy and Management, Chinese Academy of Sciences, Beijing 100190, China
2. Accounting School, Capital University of Economics and Business, Beijing 100070, China
3. Department of Urban Studies and Planning, Wayne State University, Detroit, MI 48202, USA
4. School of Business Administration, China University of Petroleum, Beijing 102249, China
5. East China Normal University, Key Laboratory of Geographical Information Science, Ministry of State Education of China, Shanghai 200062, China

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Abstract

Climate financing is a key issue in current negotiations on climate protection. This study establishes a climate financing model based on a mechanism in which donor countries set up funds for climate financing and recipient countries use the funds exclusively for carbon emission reduction. The burden-sharing principles are based on GDP, historical emissions, and consumption-based emissions. Using this model, we develop and analyze a series of scenario simulations, including a financing program negotiated at the Cancun Climate Change Conference (2010) and several subsequent programs. Results show that sustained climate financing can help to combat global climate change. However, the Cancun Agreements are projected to result in a reduction of only 0.01°C in global warming by 2100 compared to the scenario without climate financing. Longer-term climate financing programs should be established to achieve more significant benefits. Our model and simulations also show that climate financing has economic benefits for developing countries. Developed countries will suffer a slight GDP loss in the early stages of climate financing, but the long-term economic growth and the eventual benefits of climate mitigation will compensate for this slight loss. Different burden-sharing principles have very similar effects on global temperature change and economic growth of recipient countries, but they do result in differences in GDP changes for Japan and the FSU. The GDP-based principle results in a larger share of financial burden for Japan, while the historical emissions-based principle results in a larger share of financial burden for the FSU. A larger burden share leads to a greater GDP loss.

Keywords integrated assessment financial viability climate change policies burden sharing emissions reduction

Corresponding Author(s): Zheng WANG

Just Accepted Date: 21 May 2015 Online First Date: 29 July 2015 Issue Date: 05 April 2016

Cite this article:

Jing WU,Lichun TANG,Rayman MOHAMED, et al. Modeling and assessing international climate financing[J]. Front. Earth Sci., 2016, 10(2): 253-263.

URL:

https://academic.hep.com.cn/fesci/EN/10.1007/s11707-015-0511-x
https://academic.hep.com.cn/fesci/EN/Y2016/V10/I2/253

Fig.1 Integration of the climate financing module with RICE model.

Tab.1 Values of the major parameters in the technology transfer module ^a)

Tab.2 Percent burden sharing based on different principles (%)

Tab.3 Scenario assumptions

Fig.2 Global temperature rise by 2100.

Fig.3 Change of atmospheric concentration of CO₂ by 2100.

Fig.4 GDP change of China by 2100 in Scenarios 1A, 1B, 1C, and 1D.

Fig.5 GDP change of ROW by 2100 in Scenarios 1A, 1B, 1C, and 1D.

Fig.6 GDP change of China by 2100 in Scenarios 2A, 2B, 2C, and 2D.

Fig.7 GDP change of ROW by 2100 in Scenarios 2A, 2B, 2C, and 2D.

Fig.8 GDP change of donor countries in Scenarios 1A, 1B, 1C, and 1D.

Fig.9 GDP change of donor countries in Scenarios 2A, 2B, 2C, and 2D.

Fig.10 The global accumulated GDP change in Scenario 1 and Scenario 2.

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