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Optimal Learning on Climate Change: Why climate skeptics should reduce emissions

Author

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  • Sweder van Wijnbergen
  • Tim Willems

Abstract

Climate skeptics typically argue that the possibility that global warming is exogenous, implies that we should not take additional action towards reducing emissions until we know what drives warming. This paper however shows that even climate skeptics have an incentive to reduce emissions: such a directional change generates information on the causes of global warming. Since the optimal policy depends upon these causes, they are valuable to know. Although increasing emissions would also generate information, that option is inferior due to its irreversibility. We show that optimality can even imply that climate skeptics should actually argue for lower emissions than believers.

Suggested Citation

  • Sweder van Wijnbergen & Tim Willems, 2013. "Optimal Learning on Climate Change: Why climate skeptics should reduce emissions," OxCarre Working Papers 111, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  • Handle: RePEc:oxf:oxcrwp:111
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    File URL: http://www.oxcarre.ox.ac.uk/files/OxCarreRP2013111.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Tatiana Kiseleva, 2016. "Heterogeneous Beliefs and Climate Catastrophes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(3), pages 599-622, November.
    2. 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.
    3. Ahlvik, Lassi & Hyytiäinen, Kari, 2015. "Value of adaptation in water protection — Economic impacts of uncertain climate change in the Baltic Sea," Ecological Economics, Elsevier, vol. 116(C), pages 231-240.
    4. Armon Rezai & Frederick van der Ploeg, 2017. "Climate Policies Under Climate Model Uncertainty: Max-Min and Min-Max Regret," OxCarre Working Papers 187, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.

    More about this item

    Keywords

    climate policy; global warming; climate skepticism; active learning; irreversibilities;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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