Paris Climate Agreement passes the cost-benefit test

This paper examines the economic viability of the Paris Climate Agreement's temperature targets. By integrating a damage-cost curve reflecting the observed relationship between temperature and economic growth into the DICE integrated assessment model, the authors conduct a cost-benefit analysis. Their findings indicate that the agreement represents the economically optimal policy pathway for the century, robust to uncertainties regarding damage curves, climate sensitivity, socioeconomic factors, and mitigation costs. The politically motivated Paris Agreement, if properly implemented, is also economically favorable.

Nicole Glanemann, Sven N. Willner, Anders Levermann