Constraining the social discount rate by consideration of uncertainties

Posted on 11 May 2017 by Stephan Lewandowsky

An article that just appeared in the journal Global and Planetary Change, authored by me and Mark Freeman and Michael Mann, reported a simulation experiment that sought to put constraints on the social discount rate for climate economics. The article is entitled Harnessing the uncertainty monster: Putting quantitative constraints on the intergenerational social discount rate, and it does just that: In a nutshell, it shows how a single, policy-relevant certainty-equivalent declining social discount rate can be computed from consideration of a large number of sources of uncertainty and ambiguity.

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Community Based Solutions -- Why the Opposition?

Posted on 19 December 2011 by John Gregg

Much current thinking about climate change and renewable energy has been based on rational economic theory and standard modelling. A core assumption of this approach is that individuals always seek to maximise their utility; however, in many fields where human behaviour plays a substantial intervening role—such as finance, health, or taxation—this assumption has been shown to be flawed. It must therefore be of concern that the same flawed assumption is prominent in the response to climate change.

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Kyoto is Dead-Long Live New Climate Change Arrangements

Posted on 30 November 2011 by David Hodgkinson

Failure at the Copenhagen and Cancun climate change conferences in 2009 and 2010 can be put down, broadly, to two reasons: concerns by developing countries about what binding emission reduction targets might mean for their economic development, and the deadlock over post-2012 targets for developed countries.

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Avoiding Regulations: Try Meta-Regulating

Posted on 23 August 2011 by Mark Edwards

As Carmen Lawrence has pointed out here in her series on economic growth and human well-being, the issue of climate change is directed related to that of economic growth.  Our endless quest for growth is leasing us up against planetary limits in resources (resource limits) and in the earth’s capacity to absorb the outputs of that growth (sink limits).  Climate change is essentially an atmospheric sink limit that demonstrates the planet’s growing inability to absorb further emissions of carbon dioxide without significant disruption to the climate system. Growth and climate change are running into each other and this impasse will not be solved without a transformation in the way we define, measure and regulate economic growth. 

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Cutting Emissions and Growing the Economy

Posted on 23 April 2011 by Dana Nuccitelli

Putting a price on carbon emissions is often discussed as one of the main solutions to anthropogenic global warming.  Carbon dioxide is a pollutant and in economic theory, pollution is considered a negative externality – a negative effect on a party not directly involved in a transaction, which results in a market failure.  The Stern Review on the Economics of Climate Change concluded that climate change represents "the greatest example of market failure we have ever seen."

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Northeast USA Carbon Pricing Benefits Exceed Costs

Posted on 3 March 2011 by Dana Nuccitelli

The key obstacle to the implementation of carbon pricing in the USA is the fairly widespread myth that it will result in ballooning energy bills and cripple the economy.  These myths perservere despite the fact that as we have previously explored, economic studies consistently conclude that the costs of carbon pricing proposals are very minimal, and the benefits consistently outweigh the costs several times over.

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