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The 'DICE' Model: Background and Structure of a Dynamic Integrated Climate-Economy Model of the Economics of Global Warming

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Abstract

This study is designed to present the methodological and technical assumptions and the results behind the Dynamic Integrated model of Climate and the Economy (the DICE model). It is a model that attempts to use the tools of modern economics to determine an efficient strategy for coping with the threat of global warming. The fundamental premise behind this study is that societies should undertake environmental policies only when their benefits, broadly construed, exceed their costs and that the level of environmental control should be at that point where the incremental benefits of additional controls no longer exceed the incremental costs. In the area of global warming, this general strategy is easy to articulate and difficult to execute. The work embodied in this study lays out one approach -- the use of dynamic economic optimization -- to the construction of an efficient control strategy.

Suggested Citation

  • William D. Nordhaus, 1992. "The 'DICE' Model: Background and Structure of a Dynamic Integrated Climate-Economy Model of the Economics of Global Warming," Cowles Foundation Discussion Papers 1009, Cowles Foundation for Research in Economics, Yale University.
  • Handle: RePEc:cwl:cwldpp:1009
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    File URL: http://cowles.yale.edu/sites/default/files/files/pub/d10/d1009.pdf
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. 地球を冷やす安価な方法
      by ikeda_nobuo in 池田信夫 blog on 2009-11-01 11:02:50
    2. We’re massively underestimating climate costs, experts warn
      by John Upton in Grist Business and Technology on 2014-06-17 04:10:04
    3. We’re massively underestimating climate costs, experts warn
      by ? in Grist on 2014-06-17 04:10:00

    Citations

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    Cited by:

    1. Asjad Naqvi & Engelbert Stockhammer, 2017. "Directed technological change in a post-Keynesian ecological macromodel," Working Papers PKWP1714, Post Keynesian Economics Society (PKES).
    2. Wei, Yi-Ming & Mi, Zhi-Fu & Huang, Zhimin, 2015. "Climate policy modeling: An online SCI-E and SSCI based literature review," Omega, Elsevier, vol. 57(PA), pages 70-84.
    3. Plambeck, Erica L. & Hope, Chris & Anderson, John, 1997. "The model: Integrating the science and economics of global warming," Energy Economics, Elsevier, vol. 19(1), pages 77-101, March.
    4. Parson, Edward A, 1995. "Integrated assessment and environmental policy making : In pursuit of usefulness," Energy Policy, Elsevier, vol. 23(4-5), pages 463-475.
    5. Berck, Peter & Levy, Amnon & Chowdhury, Khorshed, 2012. "An analysis of the world's environment and population dynamics with varying carrying capacity, concerns and skepticism," Ecological Economics, Elsevier, vol. 73(C), pages 103-112.
    6. Stephen P.A. Brown & Hillard G. Huntington, 2003. "Terms of trade and OECD policies to mitigate global climate change," Economic and Financial Policy Review, Federal Reserve Bank of Dallas.
    7. Brown, Stephen P.A. & Huntington, Hillard G., 2015. "Evaluating U.S. oil security and import reliance," Energy Policy, Elsevier, vol. 79(C), pages 9-22.
    8. Olli Tahvonen, 1995. "Dynamics of pollution control when damage is sensitive to the rate of pollution accumulation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 5(1), pages 9-27, January.
    9. Withers, Mitch R. & Malina, Robert & Barrett, Steven R.H., 2015. "Carbon, climate, and economic breakeven times for biofuel from woody biomass from managed forests," Ecological Economics, Elsevier, vol. 112(C), pages 45-52.
    10. repec:eee:energy:v:148:y:2018:i:c:p:662-675 is not listed on IDEAS

    More about this item

    Keywords

    Air pollution; conservation; environment; climate;

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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