Recommendations for improving the treatment of risk and uncertainty in economic estimates of climate impacts in the Sixth Intergovernmental Panel on Climate Change Assessment Report

Thomas Stoerk, Gernot Wagner and Robert E. T. Ward

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Large discrepancies persist between projections of the physical impacts of climate change and economic damage estimates. These discrepancies increase with increasing global average temperature projections. Based on this observation, we recommend that in its Sixth Assessment Report (AR6), the Intergovernmental Panel on Climate Change (IPCC) improve its approach to the management of the uncertainties inherent in climate policy decisions. In particular, we suggest that the IPCC: (i) strengthen its focus on applications of decision-making under risk, uncertainty, and outright ambiguity; and (ii) estimate how the uncertainty itself affects its economic and financial cost estimates of climate damage and, ultimately, the optimal price for each ton of carbon dioxide released. Our hope is that by adopting these recommendations, AR6 will be able to resolve some of the documented inconsistencies in estimates of the physical and economic impacts of climate change and more effectively fulfill the IPCC’s mission to provide policy-makers with a robust and rigorous approach for assessing the potential future risks of climate change.

Keywords: climate change; global warming; damages; risk; uncertainty; unknowns (search for similar items in EconPapers)
JEL-codes: D81 Q54 (search for similar items in EconPapers)
Date: 2018-06-04
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (6)

Published in Review of Environmental Economics and Policy, 4, June, 2018. ISSN: 1750-6824

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