Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/28365
Authors: 
Lontzek, Thomas S.
Narita, Daiju
Year of Publication: 
2009
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

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