GHG Targets as Insurance Against Catastrophic Climate Damages
Scholarly Articles from Harvard University Department of Economics
A critical issue in climate change economics is the specification of the so-called â€œdamages functionâ€ and its interaction with the unknown uncertainty of catastrophic outcomes. This paper asks how much we might be misled by our economic assessment of climate change when we employ a conventional quadratic damages function and/or a thin-tailed probability distribution for extreme temperatures. The paper gives some numerical examples of the indirect value of various greenhouse gas (GHG) concentration targets as insurance against catastrophic climate change temperatures and damages. These numerical exercises suggest that we might be underestimating considerably the welfare losses from uncertainty by using a quadratic damages function and/or a thin-tailed temperature distribution. In these examples, the primary reason for keeping GHG levels down is to insure against high-temperature catastrophic climate risks.
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (48) Track citations by RSS feed
Published in Journal of Public Economic Theory
Downloads: (external link)
Journal Article: GHG Targets as Insurance Against Catastrophic Climate Damages (2012)
Working Paper: GHG Targets as Insurance Against Catastrophic Climate Damages (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:11315435
Access Statistics for this paper
More papers in Scholarly Articles from Harvard University Department of Economics Contact information at EDIRC.
Series data maintained by Office for Scholarly Communication ().