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Steering the Climate System: Using Inertia to Lower the Cost of Policy: Reply

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  • Derek Lemoine
  • Ivan Rudik

Abstract

Mattauch et al. (2020) claims that the quantitative conclusions in Lemoine and Rudik (2017)—henceforth, LR17—are not robust to using a climate model consistent with recent scientific results. We observe that LR17 in fact analyzes an extension to a more realistic carbon model that generates an efficient emission tax trajectory very similar to that in Mattauch et al. (2020), and we here show that simplifications in the temperature model of LR17 do not qualitatively affect their policy conclusions. Accounting for inertia reduces the initial emission tax by 42 percent and reduces the present value of abatement cost by 39 percent.

Suggested Citation

  • Derek Lemoine & Ivan Rudik, 2020. "Steering the Climate System: Using Inertia to Lower the Cost of Policy: Reply," American Economic Review, American Economic Association, vol. 110(4), pages 1238-1241, April.
    • Handle: RePEc:aea:aecrev:v:110:y:2020:i:4:p:1238-41
    DOI: 10.1257/aer.20191814
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    Cited by:

    1. Michael Grubb & Rutger-Jan Lange & Nicolas Cerkez & Pablo Salas & Ida Sognnaes, 2020. "Interactions of time and technology as critical determinants of optimal climate change policy," Tinbergen Institute Discussion Papers 20-083/VI, Tinbergen Institute, revised 29 Dec 2022.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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