EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/49475
  
Title:Dark clouds or silver linings? Knightian uncertainty and climate change PDF Logo
Authors:Chen, Yu-fu
Funke, Michael
Glanemann, Nicole
Issue Date:2011
Series/Report no.:CESifo working paper: Resource and Environment Economics 3516
Abstract:This paper examines the impact of Knightian uncertainty upon optimal climate policy through the prism of a continuous-time real option modelling framework. We analytically determine optimal intertemporal climate policies under ambiguity. Additionally, numerical simulations are provided to illustrate the properties of the model. The results indicate that increasing Knightian uncertainty accelerates climate policy, i.e. policymakers become more reluctant to postpone the timing of climate policies into the future.
Subjects:climate change
Knightian uncertainty
ê ambiguity
real options
JEL:C61
D81
Q54
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

Files in This Item:
File Description SizeFormat
664392741.pdf585.77 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/49475

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.