Modeling the Impact of Warming in Climate Change Economics

Robert Pindyck

No 15692, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Any economic analysis of climate change policy requires some model that describes the impact of warming on future GDP and consumption. Most integrated assessment models (IAMs) relate temperature to the level of real GDP and consumption, but there are theoretical and empirical reasons to expect temperature to affect the growth rate rather than level of GDP. Does this distinction matter in terms of implications for policy? And how does the answer depend on the nature and extent of uncertainty over future temperature change and its impact? I address these questions by estimating the fraction of consumption society would be willing to sacrifice to limit future increases in temperature, using probability distributions for temperature and impact inferred from studies assembled by the IPCC, and comparing estimates based on a direct versus growth rate impact of temperature on GDP.

JEL-codes: D81 Q5 Q54 (search for similar items in EconPapers)
Date: 2010-01
New Economics Papers: this item is included in nep-cba, nep-ene, nep-env and nep-res
Note: EEE
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Citations: View citations in EconPapers (8)

Published as Modeling the Impact of Warming in Climate Change Economics , Robert S. Pindyck. in The Economics of Climate Change: Adaptations Past and Present , Libecap and Steckel. 2011

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Related works:
Chapter: Modeling the Impact of Warming in Climate Change Economics (2011)
Working Paper: Modeling the Impact of Warming in Climate Change Economics (2010)
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