Tail-effect and the Role of Greenhouse Gas Emissions Control

In Chang Hwang (i.c.hwang@vu.nl), Richard Tol and Marjan Hofkes
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In Chang Hwang: Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands

Working Paper Series from Department of Economics, University of Sussex Business School

Abstract: This paper investigates the role of emissions control on reducing the tail-effect of the fat-tailed distribution of the climate sensitivity. Through a simple analysis on temperature distributions and some numerical simulations using the well-known DICE model, we find that the option for emissions control effectively prevents the tail-effect. Climate policy based on HARA utility is less sensitive to fat tails than climate policy based on CRRA utility.

JEL-codes: H23 Q54 Q58 (search for similar items in EconPapers)
Date: 2013-12
New Economics Papers: this item is included in nep-cmp, nep-ene, nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sus:susewp:6613

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