IDEAS home Printed from https://ideas.repec.org/p/ags/ucbecw/25107.html
   My bibliography  Save this paper

Global Warming, Endogenous Risk and Irreversibility

Author

Listed:
  • Fisher, Anthony C.
  • Narain, Urvashi

Abstract

This paper develops two-period analytical and numerical models to study the question: given a stock of greenhouse gases that poses a risk of future damages of unknown magnitude, and the possibility of learning about damages, how do sunk abatement capital and a nondegradable stock of greenhouse gases affect optimal first-period investment? We show that both affect investment, the former negatively and the latter positively. Additionally, endogenous risk--the risk of damages dependent on the stock of gases-- results in an increase in optimal investment for any level of capital "sunkness" or greenhouse gas degradability. Quantitatively, though, the effect of sunk capital is much stronger than the effect of greenhouse gas irreversibility or that of endogenous risk.

Suggested Citation

  • Fisher, Anthony C. & Narain, Urvashi, 2002. "Global Warming, Endogenous Risk and Irreversibility," CUDARE Working Papers 25107, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:25107
    DOI: 10.22004/ag.econ.25107
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/25107/files/wp020908.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.25107?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. Minoru Nakada, 2006. "Distributional Conflicts and the Timing of Environmental Policy," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 6(1), pages 29-38, March.
    2. Geoffrey Heal, 2008. "Climate Economics: A Meta-Review and Some Suggestions," NBER Working Papers 13927, National Bureau of Economic Research, Inc.

    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:ucbecw:25107. 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/dabrkus.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.