| Registro completo |
| Provedor de dados: |
AgEcon
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| País: |
United States
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| Título: |
CLIMATE POLICY WHEN THE DISTANT FUTURE MATTERS: CATASTROPHIC EVENTS WITH HYPERBOLIC DISCOUNTING
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| Autores: |
Karp, Larry S.
Tsur, Yacov
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| Data: |
2008-02-28
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| Ano: |
2007
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| Palavras-chave: |
Abrupt climate change
Event uncertainty
Catastrophic risk
Hyperbolic discounting
Markov Perfect Equilibria
Environmental Economics and Policy
C61
C73
D63
D99
Q54
|
| Resumo: |
Low probability catastrophic climate change can have a signifcant influence on policy under hyperbolic discounting. We compare the set of Markov Perfect Equilibria (MPE) to the optimal policy under time-consistent commitment. For some initial levels of risk there are multiple MPE; these may involve either excessive or insufficient stabilization effort. These results imply that even if the free-rider problem amongst contemporaneous decision-makers were solved, there may remain a coordination problem amongst successive generations of decision-makers. A numerical example shows that under plausible conditions society should respond vigorously to the threat of climate change.
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| Tipo: |
Working or Discussion Paper
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| Idioma: |
Inglês
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| Identificador: |
27290
http://purl.umn.edu/7181
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| Relação: |
Hebrew University of Jerusalem>Department of Agricultural Economics and Management>Discussion Papers
Discussion Paper
No. 5.07
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| Formato: |
52
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