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
Risk and Uncertainty
C61
C73
D63
D99
Q54
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Resumo: |
Low probability catastrophic climate change can have a significant 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: |
28458
http://purl.umn.edu/7186
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Relação: |
University of California, Berkeley>Department of Agricultural and Resource Economics>CUDARE Working Papers
CUDARE Working Paper
1037
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Formato: |
46
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