Optimal greenhouse gas emissions under various assessments of climate change ambiguity
AbstractThe probabilities associated with global warming damage are likely to be continuously revised in the light of new information. Such revisions of probability are the defining characteristic of ambiguity, as opposed to risk. This paper examines how climate change ambiguity may affect optimal greenhouse gas emission strategies, via the decision maker's attitude towards anticipated changes of damage probabilities. Two conceptualizations of ambiguity are distinguished, according to the emphasis placed on the ambiguity of priors or on the ambiguity of news, respectively. It is shown that the way in which ambiguity is viewed and the attitude taken towards it have a substantial influence on the optimal emission trajectory. Copyright Kluwer Academic Publishers 1996
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.
Volume (Year): 8 (1996)
Issue (Month): 2 (September)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100263
climate change; ambiguity; optimal control;
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.:
- Welsch, Heinz, 1995. "Greenhouse gas abatement under ambiguity," Energy Economics, Elsevier, vol. 17(2), pages 91-100, April.
- Dobbs, Ian M, 1991. "A Bayesian Approach to Decision-Making under Ambiguity," Economica, London School of Economics and Political Science, vol. 58(232), pages 417-40, November.
- Cline, William R, 1991. "Scientific Basis for the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 904-19, July.
- Michael Schauer, 1995. "Estimation of the greenhouse gas externality with uncertainty," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(1), pages 71-82, January.
- Peck, Stephen C. & Teisberg, Thomas J., 1993. "Global warming uncertainties and the value of information: an analysis using CETA," Resource and Energy Economics, Elsevier, vol. 15(1), pages 71-97, March.
- Jon Gjerde & Sverre Grepperud & Snorre Kverndokk, 1998.
"Optimal Climate Policy under the Possibility of a Catastrophe,"
209, Research Department of Statistics Norway.
- Gjerde, Jon & Grepperud, Sverre & Kverndokk, Snorre, 1999. "Optimal climate policy under the possibility of a catastrophe," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 289-317, August.
- Toman, Michael, 1998.
"Research Frontiers in the Economics of Climate Change,"
dp-98-32, Resources For the Future.
- Michael Toman, 1998. "Research Frontiers in the Economics of Climate Change," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 603-621, April.
- Andreas Lange, 2001. "A note on decisions under uncertainty: the impact of the choice of the welfare measure," Theory and Decision, Springer, vol. 51(1), pages 51-71, August.
- Ohl, Cornelia, 2002. "Risk aversion - a necessary condition for limiting global environmental risks?," HWWA Discussion Papers 190, Hamburg Institute of International Economics (HWWA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.