The Social Cost of Carbon with Economic and Climate Risks

• 成果类型: Article
• 署名作者: Cai, Yongyang; Lontzek, Thomas S.
• 署名单位: University System of Ohio; Ohio State University; RWTH Aachen University
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/701890
• 发表日期: 2019
• 页码: 2684-2734
• 关键词: stochastic integrated assessment; LONG-RUN RISKS; tipping points; asset prices; Fat tails; POLICY; uncertainty; MODEL; consumption; weather

摘要

Uncertainty about future economic and climate conditions substantially affects the choice of policies for managing interactions between the climate and the economy. We develop a framework of dynamic stochastic integration of climate and economy, and show that the social cost of carbon is substantially affected by both economic and climate risks and is a stochastic process with significant variation. We examine a wide but plausible range of values for critical parameters with robust results and show that large-scale computing makes it possible to analyze policies in models substantially more complex and realistic than usually used in the literature.