Estimating a Climate Change Damage Function through General Equilibrium Modeling

Roberto Roson and Francesco Bosello

No 2007_08, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: A Climate Change Damage Function (CCDF) is a reduced form relationship linking macroeconomic aggregates (e.g., potential GDP) to climate indicators (e.g., average temperature levels). This function is used in a variety of studies about climate change impacts and policy analysis. However, despite the fact that this function is key in determining results in many integrated assessment models, it is not typically calibrated in a consistent and rigorous way. This paper presents a novel approach, in which several different impacts of climate change are first assessed by means of a full-fledged computable general equilibrium model of the world economy, then results are interpolated to get a simple relationship of the CCDF type. The estimated CCDF is compared with other popular functions used in the literature, to highlight the possible implications associated with the alternative adoption of this functional relationship.

Keywords: Climate Change; Damage Function; Integrated Assessment; General Equilibrium. (search for similar items in EconPapers)
JEL-codes: C68 D58 F18 Q51 Q54 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2007
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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