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dc.contributor.authorBosetti, Valentinaen_US
dc.contributor.authorCarraro, Carloen_US
dc.contributor.authorSgobbi, Alessandraen_US
dc.date.accessioned2008-09-16en_US
dc.date.accessioned2009-07-28T08:32:00Z-
dc.date.available2009-07-28T08:32:00Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/26448-
dc.description.abstractDespite the growing concern about actual on-going climate change, there is little consensus about the scale and timing of actions needed to stabilise the concentrations of greenhouse gases. Many countries are unwilling to implement effective mitigation strategies, at least in the short-term, and no agreement on an ambitious global stabilisation target has yet been reached. It is thus likely that some, if not all countries, will delay the adoption of effective climate policies. This delay will affect the cost of future policy measures that will be required to abate an even larger amount of emissions. What additional economic cost of mitigation measures will this delay imply? At the same time, the uncertainty surrounding the global stabilisation target to be achieved crucially affects short-term investment and policy decisions. What will this uncertainty cost? Is there a hedging strategy that decision makers can adopt to cope with delayed action and uncertain targets? This paper addresses these questions by quantifying the economic implications of delayed mitigation action, and by computing the optimal abatement strategy in the presence of uncertainty about a global stabilisation target (which will be agreed upon in future climate negotiations). Results point to short-term inaction as the key determinant for the economic costs of ambitious climate policies. They also indicate that there is an effective hedging strategy that could minimise the cost of climate policy under uncertainty, and that a short-term moderate climate policy would be a good strategy to reduce the costs of delayed action and to cope with uncertainty about the outcome of future climate negotiations. By contrast, an insufficient short-term effort significantly increases the costs of compliance in the long-term.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2403en_US
dc.subject.jelC72en_US
dc.subject.jelH23en_US
dc.subject.jelQ25en_US
dc.subject.jelQ28en_US
dc.subject.ddc330en_US
dc.subject.keywordUncertaintyen_US
dc.subject.keywordclimate policyen_US
dc.subject.keywordstabilisation costsen_US
dc.subject.keyworddelayed actionen_US
dc.subject.stwKlimaschutzen_US
dc.subject.stwDaueren_US
dc.subject.stwUmweltschutzkostenen_US
dc.subject.stwEntscheidung bei Unsicherheiten_US
dc.subject.stwZeitökonomiken_US
dc.subject.stwHedgingen_US
dc.subject.stwSoziale Kostenen_US
dc.subject.stwTheorieen_US
dc.titleDelayed action and uncertain targets: how much will climate policy cost?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn577849573en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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