Managing Climate Change Under Uncertainty: Recursive Integrated Assessment at an Inflection Point

Lemoine, D. and I. Rudik, Managing Climate Change Under Uncertainty: Recursive Integrated Assessment at an Inflection Point. Annu. Rev. Res. Econ. 9, 2017, DOI: 10.1146/annurev-resource-100516-053516

48 Pages Posted: 1 Nov 2016 Last revised: 24 Mar 2017

See all articles by Derek Lemoine

Derek Lemoine

University of Arizona - Department of Economics

Ivan Rudik

Cornell University - Dyson School of Applied Economics and Management

Multiple version iconThere are 2 versions of this paper

Date Written: February 9, 2017

Abstract

Uncertainty is critical to questions about climate change policy. Recently developed recursive integrated assessment models have become the primary tools for studying and quantifying the policy implications of uncertainty. We decompose the channels through which uncertainty affects policy and quantify them in a recursive extension of a benchmark integrated assessment model. The first wave of recursive models has made valuable, pioneering efforts at analyzing disparate sources of uncertainty. We argue that frontier numerical methods will enable the next generation of recursive models to better capture the information structure of climate change and to thereby ask new types of questions about climate change policy.

Keywords: dynamic programming, insurance, learning, precaution, prudence, uncertainty

JEL Classification: C61, D91, H23, Q54, Q58

Suggested Citation

Lemoine, Derek and Rudik, Ivan, Managing Climate Change Under Uncertainty: Recursive Integrated Assessment at an Inflection Point (February 9, 2017). Lemoine, D. and I. Rudik, Managing Climate Change Under Uncertainty: Recursive Integrated Assessment at an Inflection Point. Annu. Rev. Res. Econ. 9, 2017, DOI: 10.1146/annurev-resource-100516-053516. Available at SSRN: https://ssrn.com/abstract=2862211

Derek Lemoine (Contact Author)

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States

HOME PAGE: http://www.dereklemoine.com/

Ivan Rudik

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

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