We investigate how irreversibility in “dirty” and “clean” capital stocks affects optimal climate policy, from both theoretical and numerical perspectives. An increasing carbon tax will reduce investments in assets that pollute, and so reduce emissions in the short term: our...

We investigate how irreversibility in "dirty" and "clean" capital stocks affects optimal climate policy, from both theoretical and numerical perspectives. An increasing carbon tax will reduce investments in assets that pollute, and so reduce emissions in the short term: our "irreversibility...

We show that OPEC's market power contributes to global warming by enabling producers of relatively expensive and dirty oil to start producing before OPEC reserves are depleted. We fully characterize the equilibrium of a cartel-fringe model and use a calibration to examine the importance of this...

We study monetary policy under climate change in order to answer the question of whether monetary policy should take into account the expected impacts of climate change. The setup is a new Keynesian dynamic stochastic general equilibrium model of a closed economy in which a climate module that...

Global warming can be curbed by pricing carbon emissions and thus substituting fossil fuel with renewable energy consumption. Breakthrough technologies (e.g., fusion energy) can reduce the cost of such policies. However, the chance of such a technology coming to market depends on investment. We...

In this study, the real demand for global and local environmental protection in Beijing, China, is elicited and investigated. Participants from Beijing were offered the opportunity to contribute to voluntary climate change mitigation by purchasing permits from two Chinese CO2 emissions trading...

The effects of climate policies are often studied under the assumption of perfectly competitive markets for fossil fuels. In this paper, we allow for monopolistic fossil fuel supply. We show that, if fossil and renewable energy sources are perfect substitutes, a phase will exist during which the...

In this paper I explore a model where citizens of a country vulnerable to damages from climate change may migrate to a second country, from which a steady stream of greenhouse gases occur. If this migration imposes costs on the emitting country, then migration induces a sort of pseudo carbon...

This paper investigates the vulnerability of households to climatic disasters in the low-lying atoll nation of Tuvalu. Small Island Developing States, particularly the atoll islands, are considered to be the most vulnerable to climatic change, and in particular to sea-level rise and its...

The optimal investment to mitigate climate change crucially depends on the discount rate used to evaluate the investment's uncertain future benefits. The appropriate discount rate is a function of the horizon over which these benefits accrue and the riskiness of the investment. In this paper, we...