Arbeitspapier
Additive Damages, Fat-Tailed Climate Dynamics, and Uncertain Discounting
This paper in applied theory argues that there is a loose chain of reasoning connecting the following three basic links in the economics of climate change: 1) additive damages may be more appropriate for analyzing the impacts of global warming than multiplicative damages; 2) an uncertain feedback-forcing coefficient, which might be near one with infinitesimal probability, can cause the distribution of the future time trajectory of global temperatures to have fat tails and a high variance; 3) when highvariance additive damages are discounted at an uncertain rate of pure time preference, which might be near zero with infinitesimal probability, it can make expected present discounted disutility very large. Some possible implications for welfare analysis and climate-change policy are briefly noted.
- Language
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Englisch
- Bibliographic citation
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Series: Economics Discussion Papers ; No. 2009-26
- Classification
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Wirtschaft
- Subject
-
Climate change
fat tails
Klimaveränderung
Soziale Kosten
Soziale Diskontrate
Risiko
Statistische Verteilung
Theorie
- Event
-
Geistige Schöpfung
- (who)
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Weitzman, Martin L.
- Event
-
Veröffentlichung
- (who)
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Kiel Institute for the World Economy (IfW)
- (where)
-
Kiel
- (when)
-
2009
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Weitzman, Martin L.
- Kiel Institute for the World Economy (IfW)
Time of origin
- 2009
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