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The Social Cost of Stochastic and Irreversible Climate Change / Yongyang Cai, Kenneth L. Judd, Thomas S. Lontzek.
- Format:
- Book
- Author/Creator:
- Cai, Yongyang.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w18704.
- NBER working paper series no. w18704
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2013.
- Summary:
- There is great uncertainty about the impact of anthropogenic carbon on future economic wellbeing. We use DSICE, a DSGE extension of the DICE2007 model of William Nordhaus, which incorporates beliefs about the uncertain economic impact of possible climate tipping events and uses empirically plausible parameterizations of Epstein-Zin preferences to represent attitudes towards risk. We find that the uncertainty associated with anthropogenic climate change imply carbon taxes much higher than implied by deterministic models. This analysis indicates that the absence of uncertainty in DICE2007 and similar models may result in substantial understatement of the potential benefits of policies to reduce GHG emissions.
- Notes:
- Print version record
- January 2013.
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