IDEAS home Printed from https://ideas.repec.org/p/ags/feemcl/206721.html
   My bibliography  Save this paper

Integrated Assessment of Climate Catastrophes with Endogenous Uncertainty: Does the Risk of Ice Sheet Collapse Justify Precautionary Mitigation?

Author

Listed:
  • Diaz, Delavane B.

Abstract

Greenhouse gas policies confront the trade-off between the costs of reducing emissions and the benefits of avoided climate change. The risk of uncertain and potentially irreversible catastrophes is an important issue related to the latter, and one that has not yet been well incorporated into economic models for climate change policy analysis. This paper demonstrates a multistage stochastic programming framework for catastrophe modeling with endogenous uncertainty, applied to a benchmark integrated assessment model. This study moves beyond recent catastrophe or tipping point studies with arbitrary risk, instead investigating the specific threat of the uncertain collapse of the West Antarctic Ice Sheet (WAIS), characterized in accordance with recent expert elicitations, empirical results, and physical relationships. The stochastic DICE-WAIS model introduced here informs risk management strategies that balance uncertain future climate change impacts with the costs of mitigation investments today. This work finds that accounting for the consequences of the possible WAIS collapse in a stochastic setting with endogenous uncertainty leads to more stringent climate policy recommendations (increasing the CO2 control rate by an additional 4% of global emissions and raising the social cost of carbon by $10), reflecting the need to hedge against uncertainties with downside risk as well as pursue precautionary mitigation.

Suggested Citation

  • Diaz, Delavane B., 2015. "Integrated Assessment of Climate Catastrophes with Endogenous Uncertainty: Does the Risk of Ice Sheet Collapse Justify Precautionary Mitigation?," Climate Change and Sustainable Development 206721, Fondazione Eni Enrico Mattei (FEEM).
  • Handle: RePEc:ags:feemcl:206721
    DOI: 10.22004/ag.econ.206721
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/206721/files/NDL2015-064.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.206721?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David García-León, 2016. "Adapting to Climate Change: an Analysis under Uncertainty," Working Papers 2016.10, Fondazione Eni Enrico Mattei.
    2. William D. Nordhaus, 2018. "Global Melting" The Economics of Disintegration of the Greenland Ice Sheet," Cowles Foundation Discussion Papers 2130, Cowles Foundation for Research in Economics, Yale University.
    3. Delavane Diaz & Klaus Keller, 2016. "A Potential Disintegration of the West Antarctic Ice Sheet: Implications for Economic Analyses of Climate Policy," American Economic Review, American Economic Association, vol. 106(5), pages 607-611, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:feemcl:206721. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.