Welfare specifications and optimal control of climate change: an application of fund

By Richard S. J. Tol. 2002

135 citations recorded by the source corpus.

The sensitivity of the optimal control of carbon dioxide emissions to the specification of the social welfare function is systematically explored using the FUND model. Increasing risk aversion emphasises climate change damages relative to emission reduction costs, but at the same time increases the discount rate of consumption. Without international co-operation, the discount rate effect dominates so that optimal control decreases with increasing risk aversion. With international co-operation, optimal control first increases then decreases with increasing risk aversion. Since climate change falls heaviest on the poor, optimal control increases with increasing inequity aversion. Full-fledged intergenerational welfare functions on the one hand emphasise climate change damages but on the other hand place more weight on current, poorer generations. In FUND, the two tendencies almost cancel.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/4bd3858896258e116b521543bba8b12da88ed63a

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Citations in the corpus

Possible economic impacts of a shutdown of the thermohaline circulation: an application of FUND (2004, methodology): “The impacts of not being fully adapted to new climate conditions are always negative (cf. Tol, 2002c).”
A Review of Criticisms of Integrated Assessment Models and Proposed Approaches to Address These, through the Lens of BECCS (2019, methodology): “Examples of such models are RICE [20], DICE [21], FUND [22] and PAGE [23].”
Equity, international trade and climate policy (2002, unknown): “The climate impact module is based on Tol (2002).”
Infinite uncertainty, forgotten feedbacks, and cost-benefit analysis of climate policy (2007, methodology): “The impacts of not being fully adapted to new climate conditions are always negative (cf. Tol, 2002c).”
State responsibility and compensation for climate change damages--a legal and economic assessment (2004, background): “Kemfert and Tol (2002) and Tol (2002c) look at the effect of the polluter pays principle on international climate policy, and Panayotou et al. (2002) use historical responsibility to assign emission reduction obligations.”
Technology protocols for climate change: an application of fund (2002, background): “Other impact categories (agriculture, forestry, energy, water, ecosystems) are directly expressed in money, without an intermediate layer of impacts measured in their ‘natural’ units (cf. Tol, 2002b).”
The Impact of Climate Change on Domestic and International Tourism: A Simulation Study (2006, unknown): “Scenarios for the global mean temperature are derived from the FUND model (Tol, 2002), using the same population and economic scenarios and the corresponding scenarios for energy efficiency improvements and decarbonisation.”
The Marginal Damage Costs of Different Greenhouse Gases: An Application of FUND (2014, unknown): “The income elasticities (Tol 2002b) are estimated from cross-sectional data or taken from the literature.”
Equity Weighting and the Marginal Damage Costs of Climate Change (2009, unknown): “The impacts of not being fully adapted to new climate conditions are always negative (cf. Tol, 2002c).”
On International Equity Weights and National Decision Making on Climate Change (2010, methodology): “The impacts of not being fully adapted to new climate conditions are always negative (cf. Tol, 2002c).”
Why Worry about Climate Change? A Research Agenda (2008, unknown): “This is because poorer countries have a lower adaptive capacity (Adger, 2006; Alberini et al., 2006; Smit and Wandel, 2006; Yohe and Tol, 2002), particularly in health (Tol, 2005b), and have a greater exposure to climate change, particularly in agriculture and water resources.”
The Social Cost of Carbon: Trends, Outliers and Catastrophes (2008, unknown): “…emissions around the year 2000. www.economics-ejournal.org 1994, 2006; Nordhaus and Boyer 2000; Nordhaus and Yang 1996; Rehdanz and Maddison 2005; Tol 1995, 2002).2 The total cost estimates omit some impacts of climate change; they tend to ignore interactions between different impacts, and…”
Emission abatement versus development as strategies to reduce vulnerability to climate change: an application of FUND (2005, methodology): “This paper uses version 2.4 of the Climate Framework for Uncertainty, Negotiation and Distribution (FUND) model.2 Parts of the model go back to version 1.6 (see Tol, 1999a–e, 2002c).”
The Polluter Pays Principle and Cost-Benefit Analysis of Climate Change: An Application of Fund (2006, unknown): “Kemfert and Tol (2002) do include the polluter-pays-principle, but among a range of alternatives, and really focus on the effects of spillovers of emission reduction.”