Fat-Tailed Uncertainty in the Economics of Catastrophic Climate Change

Martin Weitzman

Review of Environmental Economics and Policy, 2011, vol. 5, issue 2, 275-292

Abstract: In this article, I revisit some basic issues concerning structural uncertainty and catastrophic climate change. My target audience here are general economists, so this article could also be viewed as a somewhat less technical exposition that supplements my previous work. Using empirical examples, I argue that it is implausible that low-probability, high-negative impact events would not much influence an economic analysis of climate change. I then try to integrate the empirical examples and the theory together into a unified package with a unified message that the possibility of catastrophic climate change needs to be taken seriously. Copyright 2011, Oxford University Press.

Date: 2011
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