Australia needs a debate on the economics of climate policy where policies are subject to a wide range of economic modelling and the assumptions and sensitivities in each model are understood, Warwick McKibbin writes.

The Brookings Institution recently published a report that I co-authored on the impact of the Paris Climate Agreement on the global economy with a particular focus on the economic and environmental impacts. In that report we use a multi-region model of the world economy. To model the Paris Agreement, we converted the disparate emission targets for each country or region in their Nationally Determined Contributions (NDC) formulations into estimated reductions in CO₂emissions relative to a baseline scenario with no new climate policies. We then solved for a carbon price path in each region that achieves the NDC-consistent emissions reductions in the target year.

Read the full article, written by Professor Warwick McGibbin, on the APPS website. This article originally appeared in the Australian Financial Review.