Extended Data Fig. 1
From: Quantification of an efficiency–sovereignty trade-off in climate policy
Graphical illustration of the distributional effects between advanced economy A and developing economy B for different policy frameworks characterized by different marginal abatement cost functions fA and fB. The case ‘Uniform price w/o transfers’ with carbon prices equal to p in both regions implies different mitigation costs. In the case ‘Uniform price w/ transfers’ these differences are neutralized by transfers T. Alternatively, in the case ‘No transfer’ the differentiation of policies leads to equal costs; this case is not depicted explicitly. The case ‘Hybrid’ differentiates carbon prices to reduce T. The change of global mitigation cost is only the difference between the regional mitigation costs ΔACa − ΔACb (indicated by the red triangles), whereas the changes of transfers are represented by the orange rectangles pΔR. As long as the differentiation of prices is relatively small, the decline of transfers exceeds the increase in global mitigation costs.
