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Climate Change Catastrophes AgEcon
Pizer, William A..
Most studies that compare price and quantity controls for greenhouse gas emissions under uncertainty find that price mechanisms perform substantially better. In these studies, the benefits from reducing emissions are proportional to the level of reductions, and such linear benefits strongly favor price policies (Weitzman 1974). Catastrophic damages, however, challenge that intuition as consequences become highly nonlinear. Catastrophe avoidance offers huge benefits, and incremental adjustments on either side of the associated threshold are relatively unimportant, suggesting a strong preference for quantity controls. This paper shows that with catastrophic damages, both price and quantity mechanisms offer large gains over the business-as-usual alternative,...
Tipo: Working or Discussion Paper Palavras-chave: Climate change; Global warming; Prices versus quantities; Stock externalities; Integrated assessment; Uncertainty; Environmental Economics and Policy; Q28; D81; C68.
Ano: 2003 URL: http://purl.umn.edu/10499
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