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Building Interpretable Climate Emulators for Economics

Author

Listed:
  • Aryan Eftekhari
  • Doris Folini
  • Aleksandra Friedl
  • Felix Kubler
  • Simon Scheidegger
  • Olaf Schenk

Abstract

We introduce a framework for developing efficient and interpretable climate emulators (CEs) for economic models of climate change. The paper makes two main contributions. First, we propose a general framework for constructing carbon-cycle emulators (CCEs) for macroeconomic models. The framework is implemented as a generalized linear multi-reservoir (box) model that conserves key physical quantities and can be customized for specific applications. We consider three versions of the CCE, which we evaluate within a simple representative agent economic model: (i) a three-box setting comparable to DICE-2016, (ii) a four-box extension, and (iii) a four-box version that explicitly captures land-use change. While the three-box model reproduces benchmark results well and the fourth reservoir adds little, incorporating the impact of land-use change on the carbon storage capacity of the terrestrial biosphere substantially alters atmospheric carbon stocks, temperature trajectories, and the optimal mitigation path. Second, we investigate pattern-scaling techniques that transform global-mean temperature projections from CEs into spatially heterogeneous warming fields. We show how regional baseline climates, non-uniform warming, and the associated uncertainties propagate into economic damages.

Suggested Citation

  • Aryan Eftekhari & Doris Folini & Aleksandra Friedl & Felix Kubler & Simon Scheidegger & Olaf Schenk, 2024. "Building Interpretable Climate Emulators for Economics," Papers 2411.10768, arXiv.org, revised Jun 2025.
  • Handle: RePEc:arx:papers:2411.10768
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    File URL: http://arxiv.org/pdf/2411.10768
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    Cited by:

    1. Kotlikoff, Laurence & Kubler, Felix & Polbin, Andrey & Scheidegger, Simon, 2024. "Can today’s and tomorrow’s world uniformly gain from carbon taxation?," European Economic Review, Elsevier, vol. 168(C).

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