Adaptive model-predictive climate policies in a multi-country setting

Thierry Bréchet, Carmen Camacho and Vladimir Veliov ()

No 2012049, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The purpose of this paper is to extend the use of integrated assessment models by defining rational policies based on predictive control and adaptive behavior. The paper begins with an review of the main IAMs and their use. Then the concept of Model Predictive Nash Equilibrium (MPNE) is introduced within a general model involving heterogeneous economic agents operating in (and interfering with) a common environment. This concept captures the fact that agents do not have a perfect foresight for several ingredients of the model, including that of the environment. A version of the canonical IAM (DICE) is developed as a benchmark case. The concept of MPNE is then enhanced with adaptive learning about the environmental dynamics and the damages caused by global warming. The approach is illustrated by some numerical experiments in a two-region setting for several scenarios.

Keywords: optimal control; global warming; predictive control; adaptive behavior; integrated assessment (search for similar items in EconPapers)
JEL-codes: C61 Q54 (search for similar items in EconPapers)
Date: 2012-12-10
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Citations: View citations in EconPapers (2)

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https://sites.uclouvain.be/core/publications/coredp/coredp2012.html (application/pdf)

Related works:
Working Paper: Adaptive Model-Predictive Climate Policies in a Multi-Country Setting (2012)
Working Paper: Adaptive Model-Predictive Climate Policies in a Multi-Country Setting (2012)
Working Paper: Adaptive Model-Predictive Climate Policies in a Multi-Country Setting (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2012049

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