Journal Article - Review of Environmental Economics and Policy
Recommendations for Improving the Treatment of Risk and Uncertainty in Economic Estimates of Climate Impacts in the Sixth Intergovernmental Panel on Climate Change Assessment Report
Abstract
Large discrepancies persist between projections of the physical impacts of climate change and economic damage estimates. These discrepancies increase with increasing global average temperature projections. Based on this observation, we recommend that in its Sixth Assessment Report (AR6), the Intergovernmental Panel on Climate Change (IPCC) improve its approach to the management of the uncertainties inherent in climate policy decisions. In particular, we suggest that the IPCC (1) strengthen its focus on applications of decision making under risk, uncertainty, and outright ambiguity and (2) estimate how the uncertainty itself affects its economic and financial cost estimates of climate damage and, ultimately, the optimal price for each ton of carbon dioxide released. Our hope is that by adopting these recommendations, AR6 will be able to resolve some of the documented inconsistencies in estimates of the physical and economic impacts of climate change and more effectively fulfill the IPCC's mission to provide policymakers with a robust and rigorous approach for assessing the potential future risks of climate change.
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For Academic Citation:
Stoerk, Thomas, Gernot Wagner and Robert E. T. Ward. "Recommendations for Improving the Treatment of Risk and Uncertainty in Economic Estimates of Climate Impacts in the Sixth Intergovernmental Panel on Climate Change Assessment Report." Review of Environmental Economics and Policy, June 4, 2018.
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Abstract
Large discrepancies persist between projections of the physical impacts of climate change and economic damage estimates. These discrepancies increase with increasing global average temperature projections. Based on this observation, we recommend that in its Sixth Assessment Report (AR6), the Intergovernmental Panel on Climate Change (IPCC) improve its approach to the management of the uncertainties inherent in climate policy decisions. In particular, we suggest that the IPCC (1) strengthen its focus on applications of decision making under risk, uncertainty, and outright ambiguity and (2) estimate how the uncertainty itself affects its economic and financial cost estimates of climate damage and, ultimately, the optimal price for each ton of carbon dioxide released. Our hope is that by adopting these recommendations, AR6 will be able to resolve some of the documented inconsistencies in estimates of the physical and economic impacts of climate change and more effectively fulfill the IPCC's mission to provide policymakers with a robust and rigorous approach for assessing the potential future risks of climate change.
Want to Read More?
The full text of this publication is available via the original publication source.Stoerk, Thomas, Gernot Wagner and Robert E. T. Ward. "Recommendations for Improving the Treatment of Risk and Uncertainty in Economic Estimates of Climate Impacts in the Sixth Intergovernmental Panel on Climate Change Assessment Report." Review of Environmental Economics and Policy, June 4, 2018.
- Recommended
- In the Spotlight
- Most Viewed
Recommended
Discussion Paper - Harvard Project on Climate Agreements
An Economic Anatomy of Optimal Climate Policy
Discussion Paper - Harvard Project on Climate Agreements, Belfer Center
Confronting Deep and Persistent Climate Uncertainty
Discussion Paper - Harvard Project on Climate Agreements, Belfer Center
Climate Sensitivity Uncertainty: When is Good News Bad?
In the Spotlight
Most Viewed
Paper - Belfer Center for Science and International Affairs, Harvard Kennedy School
Attacking Artificial Intelligence: AI’s Security Vulnerability and What Policymakers Can Do About It
Analysis & Opinions - New Straits Times
Gorbachev and the End of the Cold War
Blog Post - Iran Matters
U.S.-Led Regime Change is not the Path