Cumulative carbon emissions and economic policy: In search of general principles
Simon Dietz and
Journal of Environmental Economics and Management, 2019, vol. 96, issue C, 108-129
We exploit recent advances in climate science to develop a physically consistent, yet surprisingly simple, model of climate policy. It seems that key economic models have greatly overestimated the delay between carbon emissions and warming, and ignored the saturation of carbon sinks that takes place when the atmospheric concentration of carbon dioxide rises. This has important implications for climate policy. If carbon emissions are abated, damages are avoided almost immediately. Therefore it is optimal to reduce emissions significantly in the near term and bring about a slow transition to optimal peak warming, even if optimal steady-state/peak warming is high. The optimal carbon price should start relatively high and grow relatively fast.
Keywords: Carbon price; Climate change; Cumulative emissions; Peak warming; Social cost of carbon (search for similar items in EconPapers)
JEL-codes: Q54 H23 (search for similar items in EconPapers)
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Working Paper: Cumulative carbon emissions and economic policy: in search of general principles (2019)
Working Paper: Cumulative carbon emissions and economic policy: in search of general principles (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:96:y:2019:i:c:p:108-129
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