We analyze and critique how optimizing Integrated Assessment Models, and specifically the widely-used DICE model, represent abatement costs. Many such models assume temporal independence – abatement costs in one period are not affected by prior abatement. We contrast this with three dimensions...

Induced innovation and associated issues of path dependence and inertia are of critical importance in the transition to a carbon free economy. We develop a model that, instead of modeling these processes themselves, models the implications of these characteristics and in the process allows us to...