Climate Change Policy: What Do the Models Tell Us?
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Pindyck_Climate change.pdf
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521.72 KB
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Adobe PDF
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Author(s)
Pindyck, Robert S.
Date Issued
September 2013
Journal
Journal of Economic Literature
Publisher
American Economic Association
Citation
Pindyck, Robert S. “Climate Change Policy: What Do the Models Tell Us?” Journal of Economic Literature 51, no. 3 (September 2013): 860–872.
Version
Final published version
Abstract
Very little. A plethora of integrated assessment models (IAMs) have been constructed and used to estimate the social cost of carbon (SCC) and evaluate alternative abatement policies. These models have crucial flaws that make them close to useless as tools for policy analysis: certain inputs (e.g., the discount rate) are arbitrary, but have huge effects on the SCC estimates the models produce; the models' descriptions of the impact of climate change are completely ad hoc, with no theoretical or empirical foundation; and the models can tell us nothing about the most important driver of the SCC, the possibility of a catastrophic climate outcome. IAM-based analyses of climate policy create a perception of knowledge and precision, but that perception is illusory and misleading.
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1257/jel.51.3.860
