We analyse optimal abatement and carbon pricing strategies under a variety of economic, temperature and damage risks. Economic growth, convex damages and temperature-dependent risks of climatic tipping points lead to higher growth rates of carbon prices, but gradual resolution of uncertainty...

We analyse optimal abatement and carbon pricing strategies under a variety of economic, temperature and damage risks. Economic growth, convex damages and temperature-dependent risks of climatic tipping points lead to higher growth rates, but gradual resolution of uncertainty lowers them. For...

We discuss climate change and resource scarcity from the perspective of macroeconomic modeling and quantitative evaluation. Our focus is on climate change: we build a very simple “integrated assessment model,” ie, a model that integrates the global economy and the climate in a unified...

We study how public policies affects an economy where production emits pollutants and investment in productive assets raises the economy’s overall productivity. We explore two hypotheses about how the accumulation of pollutants affects human well-being. Under the first one, there is no limit...

We develop a dynamic regulation game for a stock externality under asymmetric information and future market uncertainty. Within this framework, regulation is characterized as the implementation of a welfare-maximization program conditional on informational constraints. We identify the most...

Integrated assessment models (IAMs) are economists' primary tool for analyzing the optimal carbon tax. Damage functions, which link temperature to economic impacts, have come under fire because of their assumptions that may be incorrect in significant, but a priori unknowable ways. Here I...

The economic effects of climate change vary across both time and space. To study these effects, this paper builds a global economy-climate model featuring a high degree of geographic resolution. Carbon emissions from the use of energy in production increase the Earth's (average) temperature and...

This essay revisits the question of instrument choice for the regulation of externalities in the context of climate change. The central point is that the Pigouvian prescription to equate marginal control costs with the expected marginal benefits of damage reduction should guide the design of...

CO2 pricing is essential for an efficient transition to the green economy. Despite Daniel, Litterman and Wagner (2019)' claim that CO2 prices should decline, CO2 prices should rise over time. First, damages from global warming are proportional to economic activity and this makes CO2 prices grow...