Confronting Deep and Persistent Climate Uncertainty
Harvard University - Harvard School of Engineering and Applied Sciences; Environmental Defense Fund
Richard J. Zeckhauser
Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)
June 22, 2016
HKS Working Paper No. 16-025
Deep-seated, persistent uncertainty is a pernicious feature of climate change. One key parameter, equilibrium climate sensitivity, has eluded almost all attempts at pinning it down more precisely than a ‘likely’ range that has stalled at 1.5–4.5°C for over thirty-five years.
The marginal damages due to temperature increase rise rapidly. Thus, uncertainty in climate sensitivity significantly raises the expected costs of climate change above what they would be if the temperature increases were known to be close to a mean value 3.0°C. The costs of this uncertainty are compounded given that the distribution of possible temperature changes is strongly skewed toward higher values.
Number of Pages in PDF File: 15
Keywords: Climate sensitivity, uncertainty, risk, fat tails, mitigation, adaptation
JEL Classification: Q54, D81
Date posted: August 8, 2016