2022-06-02-IMF-The_International_Diffusion_of_Policies_for_Climate_Change_Mitigation_38页_3mb

Report Summary: International Diffusion of Policies for Climate Change Mitigation

This IMF Working Paper analyzes the international diffusion of climate change mitigation policies, with a focus on carbon pricing. It examines the diffusion mechanisms and quantifies the emission reduction benefits.

Key Findings:

• Empirical evidence supports significant international diffusion of carbon pricing policies, influenced by geographic and trade proximity.
• Carbon pricing adoption in one country increases the probability of adoption in neighboring countries by several percentage points.
• Indirect emission reductions (abroad) can exceed direct domestic reductions for many countries and are more evenly distributed than domestic emissions.
• Diffusion plays a substantial role in increasing the geographical coverage of carbon pricing policies, contributing up to ~11 percentage points by 2050.

Methodology:

• Uses semi-parametric Cox proportional hazard models with a gravity metric combining GDP and geographic distance.
• Quantifies indirect emission reductions using Monte Carlo simulations under baseline assumptions.

Implications:

• Policy diffusion offers global benefits, supporting the adoption of stringent climate policies even in small economies.
• Contributions suggest that climate policy coordination and multilateral initiatives (e.g., Partnership for Market Readiness) enhance diffusion.