RESEARCH ON THE MACROECONOMIC IMPACT OF FINANCIAL SUPPORT FROM DEVELOPED COUNTRIES TO DEVELOPING COUNTRIES UNDER THE 1.5°C TARGET

Abstract

 The economic cost of climate change mitigation measures is one of the main concerns when making policy decisions. There are several ways in which developing countries and developed countries can share the burden of climate change mitigation measures, but no study has examined the difference in impact when developed countries offer the financial support for investment to developing countries. Therefore, this study attempts to clarify the amount of financial support for investment from developed countries to developing countries necessary to avoid macroeconomic losses in developing countries and the economic impact on developed and developing countries under a scenario in which the 1.5°C target is achieved for the entire world. The results show that the required amount of financial support is about 3% of GDP of developed countries, and that the cumulative consumption loss rate for 2020-2100 is reduced from 12% to -1.6% for developing countries and increased from 3.0% to 5.8% for developed countries. Further study is needed on the realism of the assumptions made in this study, to translate the results of this study into feasible policies.