The Consequences of Uncertainty: Climate Sensitivity and Economic Sensitivity to the Climate
| Autor: | Conny Olovsson, Per Krusell, John Hassler |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
Economics and Econometrics
010504 meteorology & atmospheric sciences business.industry 05 social sciences Fossil fuel Climate change 01 natural sciences Climatology 0502 economics and business Climate sensitivity Environmental science Sensitivity (control systems) 050207 economics business 0105 earth and related environmental sciences |
| Zdroj: | Annual Review of Economics. 10:189-205 |
| ISSN: | 1941-1391 1941-1383 |
| DOI: | 10.1146/annurev-economics-080217-053229 |
| Popis: | We construct an integrated assessment model with multiple energy sources—two fossil fuels and green energy—and use it to evaluate ranges of plausible estimates for the climate sensitivity, as well as for the sensitivity of the economy to climate change. Rather than focusing explicitly on uncertainty, we look at extreme scenarios defined by the upper and lower limits given in available studies in the literature. We compare optimal policy with laissez faire, and we point out the possible policy errors that could arise. By far the largest policy error arises when the climate policy is overly passive; overly zealous climate policy (i.e., a high carbon tax applied when climate change and its negative impacts on the economy are very limited) does not hurt the economy much as there is considerable substitutability between fossil and nonfossil energy sources. |
| Databáze: | OpenAIRE |
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