The integrated assessment literature frequently replicates uncertainty by averaging Monte Carlo runs of deterministic models. This Monte Carlo analysis is, in essence, an averaged sensitivity analyses. The approach resolves all uncertainty before the first time period, drawing parameters from a...

The choice of the rate at which one should discount the long-term benefits of mitigating climate change is highly controversial. Both the level and the slope of the term structure of discount rates have been discussed intensively in relation to the determination of the social cost of carbon....

We introduce a version of the DICE-2007 model designed for uncertainty analysis. DICE is a wide-spread deterministic integrated assessment model of climate change. However, climate change, long-term economic development, and their interactions are highly uncertain. A thorough empirical analysis...

This paper presents the main results of a Delphi study involving a panel of 38 Spanish experts surveyed for their views on the most suitable discounting approach to be used in the economic evaluation of investments with intergenerational implications. Overall, the findings point to the need to...

Let X be a set of states, and let I be an infinite indexing set. Our first main result states that any separable, permutation-invariant preference order () on X^I admits an additive representation. That is: there exists a linearly ordered abelian group A and a `utility function' u:X--A such...

The paper clarifies the link between changes in risk aversion and the effect on the consumption discount rate. In a general framework that can cope with various forms of uncertainty, it is shown that the response of the consumption discount rate to a change in risk aversion depends on some...

The paper develops an axiomatic framework for rational decision making. The von Neumann-Morgenstern axioms give rise to a richer risk attitude than that captured in the standard discounted expected utility model. I derive three models that permit a more comprehensive risk evaluation. These...

The uncertainty of future economic development affects the term structure of discount rates and, thus, the intertemporal weights that are to be used in cost benefit analysis. The U.K. and France have recently adopted a falling term structure to incorporate uncertainty and the U.S. is considering...

The paper analyzes the discount rate under uncertainty. The analysis complements the probabilistic characterization of uncertainty by a measure of confidence. Special cases of the model comprise discounting under smooth ambiguity aversion as well as discounting under a disentanglement of risk...

This paper explores the challenges facing orthodox economic approaches to assessing climate control as if it were appraisal of an investment project. Serious flaws are noted in the work of economists with especial attention to the UK Government report by Stern and colleagues. The opinions...