Fat-Tailed Uncertainty in the Economics of Catastrophic Climate Change
AbstractIn this article, I revisit some basic issues concerning structural uncertainty and catastrophic climate change. My target audience here are general economists, so this article could also be viewed as a somewhat less technical exposition that supplements my previous work. Using empirical examples, I argue that it is implausible that low-probability, high-negative impact events would not much influence an economic analysis of climate change. I then try to integrate the empirical examples and the theory together into a unified package with a unified message that the possibility of catastrophic climate change needs to be taken seriously. Copyright 2011, Oxford University Press.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Association of Environmental and Resource Economists in its journal Review of Environmental Economics and Policy.
Volume (Year): 5 (2011)
Issue (Month): 2 (Summer)
Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Web page: http://reep.oxfordjournals.org/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Elizabeth Kopits & Alex L. Marten & Ann Wolverton, 2013. "Moving Forward with Incorporating "Catastrophic" Climate Change into Policy Analysis," NCEE Working Paper Series 201301, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jan 2013.
- Nicholas Stern, 2013. "The Structure of Economic Modeling of the Potential Impacts of Climate Change: Grafting Gross Underestimation of Risk onto Already Narrow Science Models," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 838-59, September.
- Olivier Chanel & Graciela Chichilnisky, 2011.
"Valuing life: experimental evidence using sensitivity to rare events,"
- Chanel, Olivier & Chichilnisky, Graciela, 2013. "Valuing life: Experimental evidence using sensitivity to rare events," Ecological Economics, Elsevier, vol. 85(C), pages 198-205.
- Jones, Benjamin & Keen, Michael & Strand, Jon, 2012.
"Fiscal implications of climate change,"
Policy Research Working Paper Series
5956, The World Bank.
- Stachurski, John & Kamihigashi, Takashi, 0.
"Stochastic stability in monotone economies,"
- Takashi Kamihigashi & John Stachurski, 2010. "Stochastic Stability in Monotone Economies," Discussion Paper Series DP2010-12, Research Institute for Economics & Business Administration, Kobe University.
- Takashi Kamihigashi & John Stachurski, 2013. "Stochastic Stability in Monotone Economies," Discussion Paper Series DP2013-02, Research Institute for Economics & Business Administration, Kobe University.
- Pycroft, Jonathan & Vergano, Lucia & Hope, Chris & Paci, Daniele & Ciscar, Juan Carlos, 2011.
"A tale of tails: Uncertainty and the social cost of carbon dioxide,"
Economics - The Open-Access, Open-Assessment E-Journal,
Kiel Institute for the World Economy, vol. 5(22), pages 1-29.
- Pycroft, Jonathan & Vergano, Lucia & Hope, Chris & Paci, Daniele & Ciscar, Juan Carlos, 2011. "A tale of tails: Uncertainty and the social cost of carbon dioxide," Economics Discussion Papers 2011-36, Kiel Institute for the World Economy.
- In Chang Hwang & Richard S.J. Tol & Marjan W. Hofkes, 2013. "Active Learning about Climate Change," Working Paper Series 6513, Department of Economics, University of Sussex.
- Alton, Theresa & Arndt, Channing & Davies, Rob & Hartley, Faaiqa & Makrelov, Konstantin, 2012. "The Economic Implications of Introducing Carbon Taxes in South Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Tack, Jesse, 2013. "A Nested Test for Common Yield Distributions with Applications to U.S. Corn," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(1), April.
- Arbuthnott, Katherine D. & Dolter, Brett, 2013. "Escalation of commitment to fossil fuels," Ecological Economics, Elsevier, vol. 89(C), pages 7-13.
- Noy, I, 2012. "Investing in Disaster Risk Reduction: A Global Fund," Working Paper Series 2390, Victoria University of Wellington, School of Economics and Finance.
- In Chang Hwang & Richard S.J. Tol & Marjan W. Hofkes, 2013. "Tail-effect and the Role of Greenhouse Gas Emissions Control," Working Paper Series 6613, Department of Economics, University of Sussex.
- Nicholas Stern, 2013. "Ethics, equity and the economics of climate change. Paper 2: Economics and Politics," Grantham Research Institute on Climate Change and the Environment Working Papers 84b, Grantham Research Institute on Climate Change and the Environment.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.