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Title:The effect of uncertainty on decision making about climate change mitigation: a numerical approach of stochastic control PDF Logo
Authors:Lontzek, Thomas S.
Narita, Daiju
Issue Date:2009
Citation:[Series:] Kiel working paper [No.:] 1539 [Editor:] Kiel Inst. for the World Economy, Kiel
Series/Report no.:Kiel working paper 1539
Abstract:We apply standardized numerical techniques of stochastic optimization (Judd [1998]) to the climate change issue. The model captures the feature that the effects of uncertainty are different with different levels of agent's risk aversion. A major finding is that the effects of stochasticity differ even in sign as to emission control with varying parameters: introduction of stochasticity may increase or decrease emission control depending on parameter settings, in other words, uncertainties of climatic trends may induce people's precautionary emission reduction but also may drive away money from abatement.
Subjects:Climate change and uncertainties
stochastic control
climate policy
JEL:C63
Q54
D81
Document Type:Working Paper
Appears in Collections:Kieler Arbeitspapiere, IfW
Publikationen von Forscherinnen und Forschern des IfW

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