Quotation Rezai, Armon. 2010. Recast DICE and its Policy Recommendations. Macroeconomic Dynamics 14 (S2), 275-289.


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Abstract

The DICE (for Dynamic Integrated model of Climate and the Economy) introduced two important policy aspects to the economic discussion of global warming. First, it argues for a “climate-policy ramp” that deems back-loading of mitigation optimal. Second, it demonstrates that an intergenerational tradeoff is at the heart of the mitigation problem. In this paper we argue that both of these findings rest on contestable assumptions. To demonstrate this a recast DICE is presented. Its outcomes show that DICE's predictions are not robust with higher migitations earlier on and slower temperature increases along the optimal path. The adoption of a baseline scenario in which pollution is a negative externality makes mitigating climate change a Pareto improvement. The alleged sacrifice of present generations vanishes. This strengthens the case for immediate policy action.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Macroeconomic Dynamics
Citation Index SSCI
WU-Journal-Rating new FIN-A, VW-C
Language English
Title Recast DICE and its Policy Recommendations
Volume 14
Number S2
Year 2010
Page from 275
Page to 289
Reviewed? Y
DOI http://dx.doi.org/10.1017/S1365100510000428

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Rezai, Armon (Details)
Organization
Institute for Multi-Level Governance and Development IN (Details)
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