Are economists getting climate dynamics right and does it matter?

Frederick (Rick) van der Ploeg, Simon Dietz, Armon Rezai and Frank Venmans

No 900, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: We show that several of the most important economic models of climate change produce climate dynamics inconsistent with the current crop of models in climate science. First, most economic models exhibit far too long a delay between an impulse of CO2 emissions and warm¬ing. Second, few economic models incorporate positive feedbacks in the carbon cycle, whereby carbon sinks remove less CO2 from the atmosphere, the more CO2 they have already removed cumulatively, and the higher is temperature. These inconsistencies affect economic prescriptions to abate CO2 emissions. Controlling for how the economy is represented, different climate mod¬els result in significantly different optimal CO2 emissions. A long delay between emissions and warming leads to optimal carbon prices that are too low and too much sensitivity of optimal carbon prices to the discount rate. Omitting positive carbon cycle feedbacks also leads to op¬timal carbon prices that are too low. We conclude it is important for policy purposes to bring economic models in line with the state of the art in climate science.

Keywords: carbon cycle; carbon price; climate change; integrated assessment modelling; positive feedbacks; social cost of carbon (search for similar items in EconPapers)
JEL-codes: Q54 (search for similar items in EconPapers)
Date: 2020-02-11
New Economics Papers: this item is included in nep-ene, nep-env, nep-hme and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
https://ora.ox.ac.uk/objects/uuid:23eeb786-9193-477e-bb48-46246254d918 (text/html)

Related works:
Journal Article: Are Economists Getting Climate Dynamics Right and Does It Matter? (2021)
Working Paper: Are economists getting climate dynamics right and does it matter? (2021)
Working Paper: Are Economists Getting Climate Dynamics Right and Does It Matter? (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oxf:wpaper:900

Access Statistics for this paper

More papers in Economics Series Working Papers from University of Oxford, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Anne Pouliquen ( this e-mail address is bad, please contact ).