Uncertainty in Integrated Assessment Modelling: Can Global Sensitivity Analysis Be of Help?

IEFE Working Paper No. 52

35 Pages Posted: 4 Sep 2012

See all articles by Barry Anderson

Barry Anderson

Bocconi University

Emanuele Borgonovo

Bocconi University - Department of Decision Sciences

Marzio Galeotti

University of Milan - Department of Environmental Science and Policy (DESP); Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy

Roberto Roson

Ca Foscari University of Venice - Dipartimento di Economia; Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy; Loyola Andalucia University

Date Written: September 4, 2012

Abstract

The complexity of integrated assessment models (IAMs) prevents the direct appreciation of the impact of uncertainty on the model predictions. However, for a full understanding and corroboration of model results, analysts might be willing, and ought to identify the model inputs that influence the model results the most (key drivers), the direction of change associated with the variation of a given input and the overall model structure (interaction analysis). We show that such information is already contained in the data set produced by Monte Carlo simulations commonly used in IAM studies and that can be extracted from it without additional calculations. Our discussion is guided by an application of the proposed methodologies to the well-known DICE model of William Nordhaus (2008). A comparison of the proposed methodology to approaches previously applied on the same model shows that robust insights concerning the dependence of future atmospheric temperature, global emissions and current carbon costs and taxes on the model’s exogenous inputs can be obtained. The method avoids the fallacy of a priori deeming the important factors based on the sole intuition.

Keywords: uncertainty, integrated assessment model, climate change, global sensitivity analysis

JEL Classification: H21, H23, H87, O44, O13, Q5, Q54

Suggested Citation

Anderson, Barry and Borgonovo, Emanuele and Galeotti, Marzio and Roson, Roberto, Uncertainty in Integrated Assessment Modelling: Can Global Sensitivity Analysis Be of Help? (September 4, 2012). IEFE Working Paper No. 52. Available at SSRN: https://ssrn.com/abstract=2141142 or http://dx.doi.org/10.2139/ssrn.2141142

Barry Anderson (Contact Author)

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Emanuele Borgonovo

Bocconi University - Department of Decision Sciences ( email )

Via Roentgen 1
Milan, 20136
Italy

Marzio Galeotti

University of Milan - Department of Environmental Science and Policy (DESP) ( email )

2 via Celoria
I-20133 Milano
Italy
+39-2-50316470 (Phone)
+39-2-50316486 (Fax)

HOME PAGE: http://www.unimi.it/chiedove/cv/ENG/marzio_galeotti.pdf?1531977155891

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

via Rontgen
Milan, 20123
Italy
+39-2-58362340 (Phone)

HOME PAGE: http://www.iefe.unibocconi.it

Roberto Roson

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy
+39 041 2349147 (Phone)
+39 041 2349176 (Fax)

HOME PAGE: http://venus.unive.it/roson

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

viale Filippetti, 9
Milan, 20122
Italy

Loyola Andalucia University ( email )

Escritor Castilla Aguayo no. 4
Cordoba, CORDOBA 14004
Spain

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