Abstract
We show that economic models of climate change produce climate dynamics inconsistent with current climate science models: (i) the delay between CO2 emissions and warming is much too long and (ii) positive carbon cycle feedbacks are mostly absent. These inconsistencies lead to biased economic policy advice. Controlling for how the economy is represented, different climate models result in significantly different optimal CO2 emissions. A long delay between emissions and warming leads to optimal carbon prices that are too low and attaches too much importance to the discount rate. Similarly we find that omitting positive carbon cycle feedbacks leads to optimal carbon prices that are too low. We conclude it is important for policy purposes to bring economic models in line with the state of the art in climate science and we make practical suggestions for how to do so.
Invited by: Research seminar Team
Local Organizer: Alessandro Tavoni
Book a slot (online)
Please contact the Local Organizer Alessandeo Tavoni if you are interested, as there will be a limited number of 20 minutes slots online (following the seminar).