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Model Uncertainty in Climate Change Economics

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  • Loic Berger
  • Massimo Marinacci

Abstract

We review recent models of choices under uncertainty that have been proposed in the economic literature. The framework that we propose is general and may be applied in many different fields of environmental economics. To illustrate, we provide a simple application in the context of an optimal mitigation policy. Our objective is to offer guidance to policy makers who face uncertainty when designing climate policy.

Suggested Citation

  • Loic Berger & Massimo Marinacci, 2017. "Model Uncertainty in Climate Change Economics," Working Papers 616, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    • Handle: RePEc:igi:igierp:616
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    Cited by:

    1. Rudik, Ivan, 2019. "Optimal climate policy when damages are unknown," SocArXiv nc43k, Center for Open Science.
    2. Ido Nevat, 2022. "Climate-informed urban design via probabilistic acceptability criterion and Sharpe ratio selection," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(1), pages 617-645, January.
    3. Ido Nevat & Gloria Pignatta & Lea A. Ruefenacht & Juan Angel Acero, 2021. "A decision support tool for climate-informed and socioeconomic urban design," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(5), pages 7627-7651, May.
    4. Loïc Berger & Massimo Marinacci, 2020. "Model Uncertainty in Climate Change Economics: A Review and Proposed Framework for Future Research," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 475-501, November.
    5. van der Ploeg, Frederick & Rezai, Armon, 2019. "The agnostic's response to climate deniers: Price carbon!," European Economic Review, Elsevier, vol. 111(C), pages 70-84.
    6. Ivan Rudik, 2020. "Optimal Climate Policy When Damages Are Unknown," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 340-373, May.
    7. van der Ploeg, Frederick & Rezai, Armon, 2017. "The Agnostic’s Response to Climate Deniers: Price Carbon!," CEPR Discussion Papers 12468, C.E.P.R. Discussion Papers.
    8. Ilke Aydogan & Loic Berger & Valentina Bosetti & Ning Liu, 2018. "Three layers of uncertainty: an experiment," Working Papers 623, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    9. Loïc Berger & Massimo Marinacci, 2020. "Model Uncertainty in Climate Change Economics: A Review and Proposed Framework for Future Research," Working Papers hal-02914088, HAL.

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