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Evolution of Modeling of the Economics of Global Warming: Changes in the DICE model, 1992-2017

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Abstract

The present study has two objectives. The first is a review of studies that estimate the global economic impacts of climate change using a systematic research synthesis (SRS). In this review, we attempt to replicate the impact estimates provided by Tol (2009, 2014) and find a large number of errors and estimates that could not be replicated. The study provides revised estimates for a total of 36 usable estimates from 27 studies. A second part of the study performs a statistical analysis. While the different specifications provide alternative estimates of the damage function, there were no large discrepancies among specifications. The preferred regression is the median, quadratic, weighted regression. The data here omit several important potential damages, which we estimate to add 25% to the quantified damages. With this addition, the estimated impact is -2.04 (+ 2.21) % of income at 3 �C warming and -8.06 (+ 2.43) % of income at 6 �C warming. We also considered the likelihood of thresholds or sharp convexities in the damage function and found no evidence from the damage estimates of a sharp discontinuity or high convexity.

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  • William D. Nordhaus & Andrew Moffat, 2017. "Evolution of Modeling of the Economics of Global Warming: Changes in the DICE model, 1992-2017," Cowles Foundation Discussion Papers 2096, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:2096
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    Keywords

    Climate change; Damages; Impacts; Survey of impacts;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs

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