What We Know and Don’t Know about Climate Change, and Implications for Policy
Robert Pindyck
Environmental and Energy Policy and the Economy, 2021, vol. 2, issue 1, 4 - 43
Abstract:
There is a lot we know about climate change, but there is also a lot we don’t know. Even if we knew how much CO2 will be emitted over the coming decades, we wouldn’t know how much temperatures will rise as a result. And even if we could predict the extent of warming that will occur, we can say very little about its impact. I explain that we face considerable uncertainty over climate change and its impact, why there is so much uncertainty, and why we will continue to face uncertainty in the near future. I also explain the policy implications of climate change uncertainty. First, the uncertainty (particularly over the possibility of a catastrophic climate outcome) creates insurance value, which pushes us to earlier and stronger actions to reduce CO2 emissions. Second, uncertainty interacts with two kinds of irreversibilities: CO2 remains in the atmosphere for centuries, making the environmental damage from CO2 emissions irreversible, pushing us to earlier and stronger actions and reducing CO2 emissions requires sunk costs, that is, irreversible expenditures, which pushes us away from earlier actions. Both irreversibilities are inherent in climate policy, but the net effect is ambiguous.
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (3)
Downloads: (external link)
http://dx.doi.org/10.1086/711305 (application/pdf)
http://dx.doi.org/10.1086/711305 (text/html)
Access to the online full text or PDF requires a subscription.
Related works:
Chapter: What We Know and Don't Know about Climate Change, and the Implications for Policy (2020) 
Working Paper: What We Know and Don't Know about Climate Change, and Implications for Policy (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:ucp:epolec:doi:10.1086/711305
Access Statistics for this article
More articles in Environmental and Energy Policy and the Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().