Quotation Rezai, Armon, Dietz, Simon, Venmans, Frank, van der Ploeg, Frederick. 2021. Are economists getting climate dynamics right and does it matter? Journal of the Association of Environmental and Resource Economists.


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Abstract

We show that economic models of climate change produce climate dynamics inconsistent with current climate science models: (i) the delay between CO2 emissions and warming is much too long and (ii) positive carbon cycle feedbacks are mostly absent. These inconsistencies lead to biased economic policy advice. Controlling for how the economy is represented, different climate models result in significantly different optimal CO2 emissions. A long delay between emissions and warming leads to optimal carbon prices that are too low and attaches too much importance to the discount rate. Similarly we find that omitting positive carbon cycle feedbacks leads to optimal carbon prices that are too low. We conclude that it is important for policy purposes to bring economic models in line with the state of the art in climate science, and we make practical suggestions for how to do so.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of the Association of Environmental and Resource Economists
Citation Index SSCI
WU-Journal-Rating new WH-B
Language English
Title Are economists getting climate dynamics right and does it matter?
Year 2021
Reviewed? Y
URL https://www.journals.uchicago.edu/doi/10.1086/713977
DOI http:///dx.doi.org/10.1086/713977
Open Access N

Associations

People
Rezai, Armon (Details)
External
Dietz, Simon (LSE, United Kingdom)
van der Ploeg, Frederick (Universität Oxford, United Kingdom)
Venmans, Frank (Universität von Mons, Belgium)
Organization
Competence Center for Sustainability Transformation and Responsibility WE (Details)
Institute for Ecological Economics IN (Details)
Economics of Inequality FI (Details)
Socioeconomics of Work Group AB (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
2928 Environmental economics (Details)
5325 Political economics (Details)
5334 Political economic policy (Details)
5335 Political economic theory (Details)
5341 Economic policy (Details)
5353 Environmental economics (Details)
5924 Environmental economics (Details)
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