Quotation van der Ploeg, Frederick, Rezai, Armon. 2019. Simple rules for climate policy and integrated assessment. Environmental and Resource Economics. 72 (1), 77-108.


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Abstract

A simple integrated assessment framework that gives rules for the optimal carbon price, transition to the carbon-free era and stranded carbon assets is presented, which highlights the ethical, economic, geophysical and political drivers of optimal climate policy. For the ethics we discuss the role of intergenerational inequality aversion and the discount rate, where we show the importance of lower discount rates for appraisal of longer run benefit and of policy makers using lower discount rates than private agents. The economics depends on the costs and rates of technical progress in production of fossil fuel, its substitute renewable energies and sequestration. The geophysics depends on the permanent and transient components of atmospheric carbon and the relatively fast temperature response, and we allow for positive feedbacks. The politics stems from international free-rider problems in absence of a global climate deal. We show how results change if different assumptions are made about each of the drivers of climate policy. Our main objective is to offer an easy back-on-the-envelope analysis, which can be used for teaching and communication with policy makers.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Environmental and Resource Economics
Citation Index SSCI
WU-Journal-Rating new FIN-A, VW-C, WH-B
Language English
Title Simple rules for climate policy and integrated assessment
Volume 72
Number 1
Year 2019
Page from 77
Page to 108
Reviewed? Y
DOI http://dx.doi.org/10.1007/s10640-018-0280-6
Open Access Y
Open Access Link https://link.springer.com/article/10.1007%2Fs10640-018-0280-6

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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