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Climatic Cost-benefit Analysis Under Uncertainty and Learning on Climate Sensitivity and Damages

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  • Ekholm, Tommi

Abstract

Cost-benefit analyses on climate change have drawn considerable critique, primarily due to contestable choices of discounting and high uncertainties in climate sensitivity and climatic damages. Consequentially, it is argued that cost-benefit analysis can suggest mitigation rates that are nearly arbitrary. This article investigates how firm conclusions can be made from cost-benefit analysis if the main uncertainties are considered endogenously in the analysis and an extensive sensitivity analysis is carried out regarding the contestable assumptions.

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  • Ekholm, Tommi, 2018. "Climatic Cost-benefit Analysis Under Uncertainty and Learning on Climate Sensitivity and Damages," Ecological Economics, Elsevier, vol. 154(C), pages 99-106.
    • Handle: RePEc:eee:ecolec:v:154:y:2018:i:c:p:99-106
    DOI: 10.1016/j.ecolecon.2018.07.024
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    Cited by:

    1. David Anthoff & Richard S. J. Tol, 2022. "Testing the Dismal Theorem," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 9(5), pages 885-920.
    2. Milad Eghtedari Naeini & Benjamin D. Leibowicz & J. Eric Bickel, 2020. "Can you trust a model whose output keeps changing? Interpreting changes in the social cost of carbon produced by the DICE model," Environment Systems and Decisions, Springer, vol. 40(3), pages 301-320, September.
    3. Tommi Ekholm, 2019. "Optimal forest rotation under carbon pricing and forest damage risk," Papers 1912.00269, arXiv.org.
    4. Gawith, David & Hodge, Ian & Morgan, Fraser & Daigneault, Adam, 2020. "Climate change costs more than we think because people adapt less than we assume," Ecological Economics, Elsevier, vol. 173(C).
    5. Ekholm, Tommi, 2020. "Optimal forest rotation under carbon pricing and forest damage risk," Forest Policy and Economics, Elsevier, vol. 115(C).
    6. Duan, Hongbo & Zhang, Gupeng & Wang, Shouyang & Fan, Ying, 2019. "Integrated benefit-cost analysis of China's optimal adaptation and targeted mitigation," Ecological Economics, Elsevier, vol. 160(C), pages 76-86.
    7. Tommi Ekholm & Erin Baker, 2022. "Multiple Beliefs, Dominance and Dynamic Consistency," Management Science, INFORMS, vol. 68(1), pages 529-540, January.
    8. Richard S.J. Tol, 2021. "Estimates of the social cost of carbon have not changed over time," Working Paper Series 0821, Department of Economics, University of Sussex Business School.
    9. Richard S.J. Tol, 2020. "Kernel density decomposition with an application to the social cost of carbon," Working Paper Series 0720, Department of Economics, University of Sussex Business School.
    10. Richard S. J. Tol, 2021. "Estimates of the social cost of carbon have increased over time," Papers 2105.03656, arXiv.org, revised Aug 2022.

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