TY - JOUR
T1 - The comparative importance for optimal climate policy of discounting, inequalities and catastrophes
AU - Budolfson, Mark
AU - Dennig, Francis
AU - Fleurbaey, Marc
AU - Siebert, Asher
AU - Socolow, Robert H.
N1 - Publisher Copyright:
© 2017, The Author(s).
PY - 2017/12/1
Y1 - 2017/12/1
N2 - Integrated assessment models (IAMs) of climate and the economy provide estimates of the social cost of carbon and inform climate policy. With the Nested Inequalities Climate Economy model (NICE) (Dennig et al. PNAS 112:15,827–15,832, 2015), which is based on Nordhaus’s Regional Integrated Model of Climate and the Economy (RICE), but also includes inequalities within regions, we investigate the comparative importance of several factors—namely, time preference, inequality aversion, intraregional inequalities in the distribution of both damage and mitigation cost and the damage function. We do so by computing optimal carbon price trajectories that arise from the wide variety of combinations that are possible given the prevailing range of disagreement over each factor. This provides answers to a number of questions, including Thomas Schelling’s conjecture that properly accounting for inequalities could lead the inequality aversion parameter to have an effect opposite to what is suggested by the Ramsey equation.
AB - Integrated assessment models (IAMs) of climate and the economy provide estimates of the social cost of carbon and inform climate policy. With the Nested Inequalities Climate Economy model (NICE) (Dennig et al. PNAS 112:15,827–15,832, 2015), which is based on Nordhaus’s Regional Integrated Model of Climate and the Economy (RICE), but also includes inequalities within regions, we investigate the comparative importance of several factors—namely, time preference, inequality aversion, intraregional inequalities in the distribution of both damage and mitigation cost and the damage function. We do so by computing optimal carbon price trajectories that arise from the wide variety of combinations that are possible given the prevailing range of disagreement over each factor. This provides answers to a number of questions, including Thomas Schelling’s conjecture that properly accounting for inequalities could lead the inequality aversion parameter to have an effect opposite to what is suggested by the Ramsey equation.
UR - http://www.scopus.com/inward/record.url?scp=85032365454&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85032365454&partnerID=8YFLogxK
U2 - 10.1007/s10584-017-2094-x
DO - 10.1007/s10584-017-2094-x
M3 - Article
C2 - 31997840
AN - SCOPUS:85032365454
SN - 0165-0009
VL - 145
SP - 481
EP - 494
JO - Climatic Change
JF - Climatic Change
IS - 3-4
ER -