Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/28955 
Year of Publication: 
2009
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [ISSN:] 1864-6042 [Volume:] 3 [Issue:] 2009-39 [Publisher:] Kiel Institute for the World Economy (IfW) [Place:] Kiel [Year:] 2009 [Pages:] 1-29
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
This paper in applied theory argues that there is a loose chain of reasoning connecting the following three basic links in the economics of climate change: 1) additive disutility damages may be appropriate for analyzing some impacts of global warming; 2) an uncertain feedback-forcing coefficient, which might be near one with infinitesimal probability, can cause the distribution of the future time trajectory of global temperatures to have fat tails and a high variance; 3) when high-variance additive damages are discounted at an uncertain rate of pure time preference, which might be near zero with infinitesimal probability, it can make expected present discounted disutility very large. Some possible implications for welfare analysis and climate-change policy are briefly noted.
Subjects: 
Climate change
fat tails
JEL: 
Q54
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

Files in This Item:
File
Size
305.75 kB





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