Climate clubs and the macro-economic benefits

of international cooperation on climate policy

The Paris agreement has provided a new framework for climate policy. Complementary
forms of international collaboration, such as climate clubs, are probably necessary to
foster and mainstream the process of gradual and voluntary increase in nationally
determined contributions. We provide a quantitative macro-economic assessment of
the costs and benefits that would be associated with different climate club
architectures. We find that the key benefits that could structure the club are enhanced
technological diffusion and the provision of low-cost climate finance, which reduce
investment costs and also enables developing countries to take full advantage of
technological diffusion. Although they face the highest absolute mitigation cost, China
and India are the largest relative winners from club participation because the burden
faced by these countries to finance their energy transition can be massively reduced
following their participation in the club.

The recovery of stratospheric ozone from past depletion is underway owing to the 1987
Montreal Protocol and its subsequent amendments, which have been effective in
phasing out the production and consumption of the major ozone-depleting substances
(ODSs). However, there is uncertainty about the future rate of recovery. This uncertainty
relates partly to unexpected emissions of controlled anthropogenic ODSs such as CCl 3F
and slower-than-expected declines in atmospheric CCl4. A further uncertainty surrounds
emissions of uncontrolled short-lived anthropogenic ODSs (such as CH2Cl2 and CHCl3),
which observations show have been increasing in the atmosphere through 2017, as well
as potential emission increases in natural ODSs (such as CH3Cl and CH3Br) induced by
climate change, changes in atmospheric concentrations of greenhouse gases N 2O and
CH4, and stratospheric geoengineering. These challenges could delay the return of
stratospheric ozone levels to historical values, (for example, the abundance in 1980), by
up to decades, depending on the future evolution of the emissions and other influencing
factors. To mitigate the threats to future ozone recovery, it is crucial to ensure that the
Montreal Protocol and its amendments continue to be implemented effectively in order
to have firm control on future levels of ODSs. This action needs to be supported by an
expansion of the geographic coverage of atmospheric observations of ODSs, by
enhancing the ability of source attribution modelling, and by improving understanding
of the interactions between climate change and ozone recovery.