Uncertain climate thresholds and optimal economic growth

Klaus Keller, Benjamin M. Bolker, David F. Bradford

Research output: Contribution to journalArticle

152 Citations (Scopus)

Abstract

We explore the combined effects of a climate threshold (a potential ocean thermohaline circulation collapse), parameter uncertainty, and learning in an optimal economic growth model. Our analysis shows that significantly reducing carbon dioxide (CO2) emissions may be justified to avoid or delay even small (and arguably realistic) damages from an uncertain and irreversible climate change - even when future learning about the system is considered. Parameter uncertainty about the threshold specific damages and the CO 2 level triggering a threshold can act to decrease near-term CO 2 abatements that maximize expected utility.

Original languageEnglish (US)
Pages (from-to)723-741
Number of pages19
JournalJournal of Environmental Economics and Management
Volume48
Issue number1
DOIs
StatePublished - Jul 1 2004

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economic growth
climate
learning
damage
thermohaline circulation
carbon dioxide
climate change
ocean
Climate
Economic growth
parameter
Damage
Parameter uncertainty
analysis
effect
Abatement
Carbon dioxide
Growth model
Climate change
CO2 emissions

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

Cite this

Keller, Klaus ; Bolker, Benjamin M. ; Bradford, David F. / Uncertain climate thresholds and optimal economic growth. In: Journal of Environmental Economics and Management. 2004 ; Vol. 48, No. 1. pp. 723-741.
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Uncertain climate thresholds and optimal economic growth. / Keller, Klaus; Bolker, Benjamin M.; Bradford, David F.

In: Journal of Environmental Economics and Management, Vol. 48, No. 1, 01.07.2004, p. 723-741.

Research output: Contribution to journalArticle

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