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Climate Policy Without Intertemporal Dictatorship: Chichilnisky Criterion Versus Classical Utilitarianism in Dice

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  • Chichilnisky, Graciela

Abstract

Dynamic Integrated Climate-Economy (DICE), and compare results for different damage functions, namely the standard one in DICE and the one proposed by Weitzman implying potential large climate damages at high temperature increases. We calculate optimal climate policy for different parameter settings and compare the results with those under the green golden rule (only final utility matters) and classical utilitarianism (no discounting). Optimal emission abatement trajectories turn out to be very different between standard dis- counted utilitarianism, classical utilitarianism and Chichilnisky specifications. The results are very sensitive to the damage function, the climate sensitivity parameter and especially the “Chichilnisky weight” given to utility of generations in the far future. We discuss conditions and reasons for preferring either classical utilitarianism or the Chichilnisky criterion, and conclude that a critical factor is the time horizon used in climate policy analysis. Adopting sustainable preferences as formalized by the Chichilnisky criterion in climate policy analysis has the advantage that the very long-term implications of greenhouse gases in the atmosphere on the environment and human welfare are not downplayed.

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  • Chichilnisky, Graciela, 2017. "Climate Policy Without Intertemporal Dictatorship: Chichilnisky Criterion Versus Classical Utilitarianism in Dice," MPRA Paper 88757, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:88757
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    More about this item

    Keywords

    Chichilnisky welfare criterion; classical utilitarianism; climate change; DICE model; Weitzman damage function.;

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • F01 - International Economics - - General - - - Global Outlook
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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