Risk-averse mitigation decisions in an unpredictable climate system

Scandinavian Journal of Economics

Volumn 113, Issue 4, 2011, Pages 937-958

  Lontzek, Thomas S ^a   Narita, Daiju ^b  

^a UNIVERSITY OF ZURICH   (Switzerland)

^b KIEL INSTITUTE FOR THE WORLD ECONOMY   (Germany)

Author keywords

Climate change and uncertainties; Climate policy; Stochastic control

Indexed keywords

CLIMATE CHANGE; CLIMATE EFFECT; DECISION MAKING; ENVIRONMENTAL POLICY; MODELING; NUMERICAL METHOD; OPTIMIZATION; RISK ASSESSMENT; STOCHASTICITY;

EID: 82455199271     PISSN: 03470520     EISSN: 14679442     Source Type: Journal    
DOI: 10.1111/j.1467-9442.2011.01679.x     Document Type: Article

References (33)

1. Arrow, K. J. and Chang, S. (1982), Optimal Pricing, Use, and Exploration of Uncertain Natural Resource Stocks, Journal of Environmental Economics and Management 9, 1-10.
2. Arrow, K. J. and Fisher, A. C. (1974), Environmental Preservation, Uncertainty, and Irreversibility, Quarterly Journal of Economics 88, 312-319.
3. Atkinson, G., Dietz, S., Helgeson, J., Hepburn, C., and Soelen, H. (2009), Siblings, not Triplets: Social Preferences for Risk, Inequality and Time in Discounting Climate Change, Economics: The Open-Access Open-Assessment E-Journal.
4. Beltratti, A., Chichilnisky, G., and Heal, G. (1998), Uncertain Future Preferences and Conservation in Chichilnisky, G., Heal, G., and Vercelli, S. (eds.), Sustainability: Dynamics and Uncertainty, Kluwer, Dordrecht, pp. 257-275.
5. Bosetti, V., Carraro, C., Sgobbi, A., and Tavoni, M. (2009), Delayed Action and Uncertain Stabilization Targets: How Much Will Climate Policy Cost? Climatic Change 96, 299-312.
6. Clark, L. E., Edmonds, J. A., Krey, B. H., Richels, R. G., Rose, S., and Tavoni, M. (2009), International Climate Policy Architectures: Overview of the EMF 22 International Scenarios, Energy Economics 31, 64-81.
7. Epstein, L. G. and Zin, S. E. (1989), Substitution, Risk Aversion, and the Temporal Behavior of Consumption and Asset Returns: A Theoretical Framework, Econometrica 57, 937-969.
8. Fisher, A. C. and Narain, U. (2003), Global Warming, Endogenous Risk, and Irreversibility, Environmental and Resource Economics 25, 395-416.
9. Fleming, W. (1971), Stochastic Control for Small Noise Intensities, SIAM Journal of Control 9, 1025-1042.
10. Gaspar, L. and Judd, K. L. (1997), Solving Large-Scale Rational Expectations Models, Macroeconomic Dynamics 1, 45-75.
11. Gollier, C., Jullien, B., and Treich, N. (2000), Scientific Progress and Irreversibility: An Economic Interpretation of the Precautionary Principle, Journal of Public Economics 75, 229-253.
12. Heal, G. and Kriström, B. (2002), Uncertainty and Climate Change, Environmental and Resource Economics 22, 3-39.
13. Henry, C. (1974), Investment Decisions under Uncertainty: The Irreversibility Effect, American Economic Review 64 (6), 1006-1012.
14. Judd, K. L. (1992), Projection Methods for Solving Aggregate Growth Models, Journal of Economic Theory 59, 410-452.
15. Judd, K. L. (1996), Approximation, Perturbation, and Projection Methods in Economic Analysis Handbook of Computational Economics, North-Holland, Amsterdam.
16. Judd, K. L. (1998), Numerical Methods in Economics, MIT Press, Cambridge, MA.
17. Judd, K. L. and Sy-Ming, G. (1997), Asymptotic Methods for Aggregate Growth Models, Journal of Economic Dynamics and Control 21, 1025-1042.
18. Kihilstrom, R. E. and Mirman, L. J. (1974), Risk Aversion with Many Commodities, Journal of Economic Theory 8, 361-388.
19. Kolstad, C. D. (1996), Fundamental Irreversibilities in Stock Externalities, Journal of Public Economics 60, 221-233.
20. Lange, A. and Treich, N. (2008), Uncertainty, Learning and Ambiguity in Economic Models on Climate Policy: Some Classical Results and New Directions, Climatic Change 89, 7-21.
21. Magill, M. J. P. (1977), A Local Analysis ofn-Sector Capital Accumulation under Uncertainty, Journal of Economic Theory 15, 211-219.
22. National Research Council (2002), Abrupt Climate Change: Inevitable Surprises, National Academy Press, Washington, DC.
23. Nordhaus, W. D. (1994), Managing the Global Commons, MIT Press, Cambridge, MA.
24. Nordhaus, W. D. (2008), A Question of Balance: Weighing the Options on Global Warming Policies, Yale University Press, New Haven, CT.
25. Nordhaus, W. D. and Popp, D. (1999), What is the Value of Scientific Knowledge? An application to Global Warming Using the Price Model, The Energy Journal 18, 1-45.
26. Peck, S. C. and Teisberg, T. J. (1993), Global Warming Uncertainties and Value of Information: An Analysis Using CETA, Resource and Energy Economics 15, 71-97.
27. Peterson, S. (2006), Uncertainty and Economic Analysis of Climate Change: A Survey of Approaches and Findings, Environmental Modeling and Assessment 11, 1-17.
28. Pindyck, R. S. (2000), Irreversibilities and the Timing of Environmental Policy, Resource and Energy Economics 22, 233-259.
29. Pindyck, R. S. (2007), Uncertainty in Environmental Economics, Review of Environmental Economics and Policy 1, 46-65.
30. Pizer, W. A. (1999), The Optimal Choice of Climate Change Policy in the Presence of Uncertainty, Resource and Energy Economics 21, 255-287.
31. Scott, M. J., Sands, R. D., Edmonds, J., Liebetrau, A. M., and Engel, D. W. (1999), Uncertainty in Integrated Assessment Models: Modeling with minicam 1.0, Energy Policy 27, 885-879.
32. Tsur, Y. and Zemel, A. (1998), Pollution Control in an Uncertain Environment, Journal of Economic Dynamics and Control 22, 967-975.
33. Ulph, A. and Ulph, D. (1997), Global Warming, Irreversibility and Learning, Economic Journal 107, 636-650.