Economic pathways: A new approach to climate policy

Increasingly strict climate policies are extremely important to achieve internationally agreed temperature targets. This column argues that theory-based scenarios, called "economic pathways," are a powerful tool for inducing effective policies. Calibrating a dynamic economic climate model to calculate different economic paths reveals that deep decarbonization only slightly delays economic development, while population growth is not strongly linked to climate policy. If the adoption of stricter climate policies becomes more likely as the phase-out of fossil fuels accelerates, early decarbonisation is not only feasible, but also attractive and realistic. (Lucas Bretschger, more at cepr.org)