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  • Department of Economics / Institutionen för nationalekonomi med statistik
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  • School of Business, Economics and Law / Handelshögskolan
  • Department of Economics / Institutionen för nationalekonomi med statistik
  • Working papers
  • Redigera dokument
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Robust Control in Global Warming Management: An Analytical Dynamic Integrated Assessment

Sammanfattning
Knightian uncertainty in climate sensitivity is analyzed in a two sec- toral integrated assessment model (IAM), based on an extension of DICE. A representative household that expresses ambiguity aversion uses robust control to identify robust climate policy feedback rules that work well over IPCC climate-sensitivity uncertainty range [1]. Ambi- guity aversion, together with linear damage, increases carbon cost in a similar way as a low pure rate of time preference. Secondly, in combi- nation with non-linear damage it makes policy responsive to changes in climate data observations as it makes the household concerned about misreading sudden increases in carbon concentration rate and temper- ature as sources to global warming. Perfect ambiguity aversion results in an infinite expected shadow carbon cost and a zero carbon-intensive consumption path. Dynamic programming identifies an analytically tractable solution to the model.
URL:
http://hdl.handle.net/2077/20081
Samlingar
  • Working papers
Fil(er)
gupea_2077_20081_1.pdf (315.2Kb)
Datum
2009-04-17
Författare
Hennlock, Magnus
Nyckelord
robust control
climate change policy
carbon cost
Knightian uncertainty
ambiguity aversion
integrated assessment models
Publikationstyp
report
ISSN
1403-2465
Serie/rapportnr.
Working Papers in Economics
354
Språk
eng
Metadata
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