Managing Climate Change Under Uncertainty: Recursive Integrated Assessment at an Inflection Point

Derek Lemoine and Ivan Rudik ()
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Ivan Rudik: Department of Economics and Center for Agricultural and Rural Development, Iowa State University, Ames, Iowa 50011

Annual Review of Resource Economics, 2017, vol. 9, issue 1, 117-142

Abstract: Uncertainty is critical to questions about climate change policy. Recently developed recursive integrated assessment models have become the primary tools for studying and quantifying the policy implications of uncertainty. We decompose the channels through which uncertainty affects policy and quantify them in a recursive extension of a benchmark integrated assessment model. The first wave of recursive models has made valuable, pioneering efforts at analyzing disparate sources of uncertainty. We argue that frontier numerical methods will enable the next generation of recursive models to better capture the information structure of climate change and to thereby ask new types of questions about climate change policy.

Keywords: dynamic programming; insurance; learning; precaution; prudence; uncertainty; climate; greenhouse gas; carbon (search for similar items in EconPapers)
JEL-codes: C61 D91 H23 Q54 Q58 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (21)

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Related works:
Working Paper: Managing Climate Change Under Uncertainty: Recursive Integrated Assessment at an Inflection Point (2017)
Working Paper: Managing Climate Change Under Uncertainty: Recursive Integrated Assessment at an Inflection Point (2016)
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