Global Warming And Extreme Events: Rethinking The Timing And Intensity Of Environmental Policy

Yu-Fu Chen and Michael Funke

No 2010-48, SIRE Discussion Papers from Scottish Institute for Research in Economics (SIRE)

Abstract: The possibility of low-probability extreme events has reignited the debate over the optimal intensity and timing of climate policy. In this paper we therefore contribute to the literature by assessing the implications of low-probability extreme events on environmental policy in a continuous-time real options model with tail risk. In a nutshell, our results indicate the importance of tail risk and call for foresighted pre-emptive climate policies.

Keywords: Climate Policy; Extreme Events; Real Options; Levy process (search for similar items in EconPapers)
Date: 2010
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Related works:
Working Paper: Global warming and extreme events: Rethinking the timing and intensity of environment policy (2011)
Working Paper: Global Warming and Extreme Events: Rethinking the Timing and Intensity of Environmental Policy (2010)
Working Paper: GLOBAL WARMING AND EXTREME EVENTS: RETHINKING THE TIMING AND INTENSITY OF ENVIRONMENTAL POLICY (2010)
Working Paper: Global warming and extreme events: Rethinking the timing and intensity of environment policy (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:edn:sirdps:185

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