BinD: A Model of Growth, Climate Change, and Debt Sustainability

19396 6 104488 2 318366 document 104488 SSRN-id4582207.pdf application/pdf eac69e6f95f84feb6a0ec3a020f61b5a MD5 2581711 2024-01-09 15:45:24 https://pure.iiasa.ac.at/id/eprint/19396/1/SSRN-id4582207.pdf 19396 1 1 application/pdf text en public cc_by_nc_4

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submitted 104490 1 318377 document 104490 indexcodes.txt text/x-c++ d485bad35cc4ef5ec6df945bb9bb8eb2 MD5 11626 2024-01-09 15:55:20 https://pure.iiasa.ac.at/id/eprint/19396/2/indexcodes.txt 19396 2 2 text/x-c++ other Generate index codes conversion from text to indexcodes en public

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http://eprints.org/relation/isVersionOf https://pure.iiasa.ac.at/id/document/104488 http://eprints.org/relation/isVolatileVersionOf https://pure.iiasa.ac.at/id/document/104488 http://eprints.org/relation/issmallThumbnailVersionOf https://pure.iiasa.ac.at/id/document/104488 archive 353 disk0/00/01/93/96 2024-01-09 15:46:20 2024-01-09 15:46:20 2024-01-09 15:46:20 article show 1 Omer O. Dunz N. Naqvi A. 8691 0000-0002-0986-6009 BinD: A Model of Growth, Climate Change, and Debt Sustainability submitted ASA EM climate change, economic growth, low and middle income countries, sustainable economic development, climate financial resilience Climate change disproportionately impacts capital and output in low- and middle-income countries (LMICs). Limited fiscal space and high dependence on capital good imports further curtail their ability to make timely climate-resilient investments. In this paper we present a demand-driven model that is supply-side constrained due to insufficient build up of production capacity. Calibrating the model to Fiji, we evaluate growth pathways for three climate futures – 2C, 3C, and 4C global warming by the end of the century. We evaluate the role of a public climate fund to enable partial recovery that is financed through four different schemes - debt-led recovery, higher tax on households, higher taxes on capitalists, and unconditional grants from the rest of the world. Recovery is possible in the 2C scenario, but the 3C and 4C scenarios increasingly face higher investment costs in the face of lower growth and saving rates. In the 4C scenario, even the most generous unconditional grants scheme fails to prevent the downward spiral of hitting capacity constraints despite an initial boost to output. These insights underscore the need for effective and equitable domestic climate policies and affordable finance and compensation to support sustainable development in vulnerable countries. 2023-09-25 submitted doi:10.2139/ssrn.4582207 2914 public SSRN Electronic Journal FALSE 1556-5068 no info:eu-repo/semantics/article