What is the Value of Scientific Knowledge? An Application to Global Warming Using the PRICE Model
AbstractGovernments must cope with the enormous uncertainties about both future climate change as well as the costs and benefits of slowing climate change. This study analyses the value of improved information about a variety of geophysical and economic processes. The value of information is estimated using the "PRICE model" which is a probabilistic extension of earlier models of the economics of global warming. The study uses five different approaches to estimating the value of information about all uncertain parameters and about individual parameters. It is estimated that the value of early information is between $1 and $2 billion for each year that resolution of uncertainty is moved toward the present. We estimate that the most important uncertain variables are the damages of climate change and the costs of reducing greenhouse gas emissions. Resolving the uncertainties about these two parameters would contribute 75 percent of the value of improved knowledge.
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Bibliographic InfoArticle provided by International Association for Energy Economics in its journal The Energy Journal.
Volume (Year): Volume18 (1997)
Issue (Month): Number 1 ()
Other versions of this item:
- William D. Nordhaus & David Popp, 1996. "What is the Value of Scientific Knowledge? An Application to Global Warming Using the PRICE Model," Cowles Foundation Discussion Papers 1117, Cowles Foundation for Research in Economics, Yale University.
- F0 - International Economics - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William R. Cline, 1992. "Economics of Global Warming, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 39.
- Peter Hoeller & Andrew Dean & Masahiro Hayafuji, 1992. "New Issues, New Results: The OECD's Second Survey of the Macroeconomic Costs of Reducing CO2 Emissions," OECD Economics Department Working Papers 123, OECD Publishing.
RePEc Biblio mentionsAs found on the RePEc Biblio, the curated bibliography for Economics:
- > Environmental and Natural Resource Economics > Climate economics > Discounting, equity, uncertainty
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