Quotation Rezai, Armon, Van der Ploeg, Frederick. 2017. Climate policies under climate model uncertainty: max-min and min-max regret. Energy Economics, 68, 4-16.


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Abstract

Temperature responses and optimal climate policies depend crucially on the choice of a particular climate model. To illustrate, the temperature responses to given emission reduction paths implied by the climate modules of the well-known integrated assessments models DICE, FUND and PAGE are described and compared. A dummy temperature module based on the climate denialists' view is added. Using a simple welfare-maximising growth model of the global economy, the sensitivity of the optimal carbon price, renewable energy subsidy and energy transition to each of these climate models is discussed. The paper then derives max-min, max-max and min-max regret policies to deal with this particular form of climate (model) uncertainty and with climate scepticism. The max-min or min-max regret climate policies rely on a non-sceptic view of global warming and lead to a substantial and moderate amount of caution, respectively. The max-max leads to no climate policies in line with the view of climate sceptics.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Energy Economics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-B, VW-D, WH-B
Language English
Title Climate policies under climate model uncertainty: max-min and min-max regret
Volume 68
Year 2017
Page from 4
Page to 16
Reviewed? Y
DOI http://dx.doi.org/10.1016/j.eneco.2017.10.018
Open Access N

Associations

People
Rezai, Armon (Details)
External
Van der Ploeg, Frederick (Oxford University, United Kingdom)
Organization
Institute for Ecological Economics IN (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
2928 Environmental economics (Details)
5325 Political economics (Details)
5334 Political economic policy (Details)
5335 Political economic theory (Details)
5341 Economic policy (Details)
5353 Environmental economics (Details)
5924 Environmental economics (Details)
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