The Role of “Warm-glow Giving” in Mitigating Climate Change and Promoting Sustainable Economic Growth

Gomez-Cuenca, Carolina (2022) The Role of “Warm-glow Giving” in Mitigating Climate Change and Promoting Sustainable Economic Growth. PhD thesis, University of Nottingham.

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This dissertation studies how the incentives behind the new direction of the international climate change negotiations since 2015 can be modelled by combining the two theories of warm-glow giving and endogenous growth. Linking these two theories in this context for the first time confirms that a country's environmental commitments and economic growth are not mutually exclusive. This dissertation provides a framework on which future International Environmental Agreements (IEAs) can be based in order to avoid an environmental disaster.

The first chapter explores how the voluntary premium that people are paying for sustainable energy can be explained by warm-glow giving theory and the escalating global concern about environmental degradation. An endogenous growth model with a warm-glow giving extension (WGPM) demonstrates a less expensive clean energy transition rather than a model relying exclusively on carbon taxes and clean R&D subsidies. However, warm-glow alone cannot explain the changes in climate change negotiations seen in the Paris Agreement and the emissions growth limit established. The second chapter demonstrates how this can be achieved by extending the WGPM to include nonhomothetic preferences.

As part of the solution for environmental degradation, chapter three will show how WGPM provides a decision-making tool for firms and policymakers in their cost-benefit analysis of emission reduction. This chapter, therefore, focuses on empirically validating WGPM through the design of a VEC model and demonstrates how the essential carbon tax value can be accurately captured and forecast by WGPM in the short term using data for the European Community economy.

Finally, chapter four supports our theoretical framework to the extent that it looks at how past IEAs until Paris failed in reducing emissions worldwide. A GVAR model is built based on 90% of global GDP, the total number of IEAs subscribed between 1995 and 2015, and, significantly, both inputs and outputs for industries. The model exposes how past IEA commitments on emissions targets were realised through some OECD countries 'off-shoring' to others.

Item Type: Thesis (University of Nottingham only) (PhD)
Supervisors: Lee, Kevin
Licandro, Omar
Keywords: International Environmental Agreement, environmental agreements; environment; economy; warm-glow giving
Subjects: H Social sciences > HD Industries. Land use. Labor
Faculties/Schools: UK Campuses > Faculty of Social Sciences, Law and Education > School of Economics
Item ID: 69467
Depositing User: Gomez cuenca, Carolina
Date Deposited: 01 Nov 2023 14:45
Last Modified: 01 Nov 2023 14:45

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