WP3 - Interaction of Structural Change and Climate Policy

Developing and emerging countries regularly bring forward concerns that ambitious mitigation policies might harm their economic development. Due to the lack of sectoral detail, standard one-sector models of economic growth are constrained in representing long-run growth effects of climate policies. This work package aims to use and develop a multi-sectoral growth (MSG) model that explores the interaction between climate policy and structural change including the effect of climate policy on long term economic growth. While WP 3.1 focuses on the impact that structural change will have on the effectiveness of climate policy, WP 3.2 uses insights and tools from WP 3.1 to provide a compact assessment of global mitigation paths towards 2 °C stabilization under varying structural change dynamics. This work is linked to a major effort in developing policy-oriented scenarios that also will be used in WP4.