Uncertainty and Insurance in Endogenous Climate Change

Arbeitspapier

We investigate the economic impact of stochastic endogenous extreme events and insurance in a growth model. Our analytical results and computational experiments show that i) transparency of the insurance sector is the decisive requisite for abatement activities, implying substantial policy opportunities; ii) we can fully characterize and quantify the impact of uncertainty on the social planner's decisions; iii) a decentralized economy will under-invest in abatement without adequate policy interventions; iv) precautionary beliefs on the frequency of extreme events lead to more sustainability; v) technical change does not change the ordering of the paths but leads to a more sustainable future; v) a social security system which prices insurance fairly is preferable to an insurance industry which provides insurance with an overhead.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Research Papers in Economics ; No. 2/09

Classification and Topics

• Classification: Wirtschaft
• Subject: economic growth ; climate change ; insurance ; integrated assessment ; extreme events ; catastrophes

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Müller-Fürstenberger, Georg ; Schumacher, Ingmar
• Event: Veröffentlichung
• (who): Universität Trier, Fachbereich IV – Volkswirtschaftslehre
• (where): Trier
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/88665
• Last update: 10.03.2025, 11:44 AM CET