Climate Change Expectations and Endogenous Economic Growth in the DICE Model

Arbeitspapier

This paper studies the investment based growth rate effects of climate change. The analysis is based on the Integrated Assessment Model DICE by Nordhaus (2008). I depart from the original model, in that endogenous investments into a knowledge stock drive economic growth. Due to a negative capital accumulation as well as savings effect on the knowledge stock, climate change has a negative impact on gross income that lasts into the long run. In order to be able to quantify the growth rate effects, I calibrate the endogenous growth model version of DICE towards its exogenous growth counterpart. I find that in the exogenous growth model version of DICE, compared to its endogenous growth equivalent, in the social optimum, gross income is over-estimated by 2.3 % in 2100 and by 6.8 % in 2150.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7761

Classification and Topics

• Classification: Wirtschaft ; Environment and Growth ; Climate; Natural Disasters and Their Management; Global Warming
• Subject: endogenous economic growth and climate change

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ciesielski, Anna Sophia
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/201987
• Last update: 10.03.2025, 11:44 AM CET