Beyond the Stern Review: Lessons from a risky venture at the limits of the cost–benefit analysis

Jean-Charles Hourcade, Philippe Ambrosi and Patrice Dumas ()
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Jean-Charles Hourcade: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique
Philippe Ambrosi: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique
Patrice Dumas: LMD - Laboratoire de Météorologie Dynamique (UMR 8539) - UPMC - Université Pierre et Marie Curie - Paris 6 - INSU - CNRS - Institut national des sciences de l'Univers - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - Département des Géosciences - ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres

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Abstract: This paper argues that debates amongst economists triggered by the Stern Review are partly relevant, focusing on key parameters translating real ethical issues, and partly misplaced in that they do not consider enough other determinants of climate change damages: i) the specifications of the utility function used for the assessments (preference for the environment, preference for smooth growth paths), ii) the interplay between uncertainty and the sequentiality of the decision, and iii) whether the growth engines behind the integrated assessment models can account for transient disequilibrium and sub-optimality. We derive some suggestions for any future research agenda in integrated assessment modelling, whatever the position of the analysts about the relevance of the intertemporal optimisation framework and the Bayesian approach to uncertainty in the climate affair.

Keywords: Integrated assessment model; Discounting; Damage assessment; Environmental value; Intragenerational equity; Social preference; Non-market impacts; Intergenerational equity; Adaptation; Irreversibility; Decision-making; Information value; Uncertainty; Cost–benefit analysis (search for similar items in EconPapers)
Date: 2009-08
Note: View the original document on HAL open archive server: https://enpc.hal.science/hal-00716769v1
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Citations: View citations in EconPapers (7)

Published in Ecological Economics, 2009, 68 (10), pp.2479-2484. ⟨10.1016/j.ecolecon.2009.04.011⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00716769

DOI: 10.1016/j.ecolecon.2009.04.011

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