Projections and Uncertainties about Climate Change in an Era of Minimal Climate Policies

By William Nordhaus. American Economic Journal: Economic Policy, 2018

391 citations recorded by the source corpus.

Climate change remains one of the major international environmental challenges facing nations. Up to now, nations have adopted minimal policies to slow climate change. Moreover, there has been no major improvement in emissions trends as of the latest data. The current study uses the updated DICE model to develop new projections of trends and impacts of alternative climate policies. It also presents a new set of estimates of the uncertainties about future climate change and compares the results with those of other integrated assessment models. The study confirms past estimates of likely rapid climate change over the next century if major climate-change policies are not taken. It suggests that it is unlikely that nations can achieve the 2°C target of international agreements, even if ambitious policies are introduced in the near term. The required carbon price needed to achieve current targets has risen over time as policies have been delayed. (JEL Q54, Q58)

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

View Paper: https://www.semanticscholar.org/paper/863e547d0f2f00f0a19d6588d960e91f0dee04c2

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Citations in the corpus

Evolution of modeling of the economics of global warming: changes in the DICE model, 1992–2017 (2018, methodology): “V20: Final adjust of climate model and other forcings; match equilibrium and transient temperature sensitivity from 2016R2 model. v21: Adjusts for abatement in 2016R2 model. v22: Is the current model (DICE-2016R2).”
Long-Term Macroeconomic Effects of Climate Change (2019, neutral): “Pesaran and Smith (1995), Pesaran (1997), and Pesaran and Shin (1999) show that: the traditional ARDL approach can be used for long-run analysis; it is valid regardless of whether the underlying variables are I (0) or I (1); and it is robust to omitted variables bias and bi-directional feedback effe”
How can green differentiated capital requirements affect climate risks? A dynamic macrofinancial analysis (2020, neutral): “The overall way that green investment has been formalised in our model departs from traditional Integrated Assessment Models (IAMs) (see e.g. Nordhaus, 2018) on two key aspects.”
Coping With Collapse: A Stock-Flow Consistent Monetary Macrodynamics of Global Warming (2018, methodology): “…↵ Constant growth rate of labor productivity 0.02 Selected among a range of reasonable values ⇤ Heat exchange coefficient between temperature layers 0.0176 SI Nordhaus (2017), adjusted for a continuous framework Depreciation rate of capital 0.04 Inklaar and Timmer (2013) ELand Growth rate of…”
Innovation, growth and the transition to net-zero emissions (2021, background): “Traditional Integrated Assessment Models (e.g. Nordhaus, 2018) are not focused on the processes of innovation and transformation (Aghion et al., 2014), or representing path dependence (Grubb et al., 2021b) 7 Spillovers or externalities arise from the fact that technological knowledge is a public…”
Poverty and distributional effects of carbon pricing in low- and middle-income countries – A global comparative analysis (2019, background): “Considerably higher global price levels might be justified when considering more ambitious temperature targets (IPCC, 2018) or possible catastrophic damages of climate change (Howard & Sterner, 2017; Nordhaus, 2018).”
The Heat Is on: A Framework for Measuring Financial Stress Under Disruptive Energy Transition Scenarios (2019, background): “…emissions, the level of discount rates, the damage function, or the adaptation costs, will easily affect the overall conclusions (see, e.g., discussions in Stern (2007), Goulder and Pizer (2008), Pindyck (2013), Gillingham et al. (2015), Brock and Hansen (2018), Batten (2018), or Nordhaus (2018)).”
Pricing Uncertainty Induced by Climate Change (2020, neutral): “In terms of the previous environmental economics literature, we imagine the case in which γ` 2 “ 0 as an approximation to Nordhaus (2018). One can see from this figure that our 3 degrees C percentage loss is approximately the same as that of Nordhaus and Moffatt (2017) who say,”
IPCC baseline scenarios have over-projected CO2 emissions and economic growth (2020, result): “In contrast, other recent models project smaller economic damages relative to GDP than the above comparison suggests (e.g. 8.5% at 6 ◦ of warming; Nordhaus 2018; but see also Keen (2020), which argues that such estimates are biased low for reasons similar to those discussed above).”
The appallingly bad neoclassical economics of climate change (2020, neutral): “…on GDP of a 4°C increase in temperature – the level he describes as optimal in his ‘ Nobel Prize ’ lecture, since according to his model, it minimises the joint costs of damage and abatement (Nordhaus, 2018a, Slides 6 & 7) – was reduced from a 7% fall in 1992 to a 3.6% fall in 2018 (see Figure 5).”
Climate Change, Financial Stability and Monetary Policy (2018, neutral): “Note that the parameter values that we have used for the carbon cycle and temperature equations rely on the recent updates of the DICE (Dynamic Integrated Climate-Economy) model by Nordhaus (2016).”
A Financial Macro-Network Approach to Climate Policy Evaluation (2018, background): “The process of financialization of the economy in the last two decades (Palley, 2016) suggests that the magnitude of the amplification effect could be increasing.”