Data and Code for: Optimal climate policy when damages are unknown

Principal Investigator(s):  View help for Principal Investigator(s) Ivan Rudik, Cornell University

Version:  View help for Version V1

Name File Type Size Last Modified
  estimate_damage_parameters 09/04/2019 01:24:PM
  generate_plots 09/04/2019 05:29:PM
  results 09/04/2019 05:24:PM
  terminal 08/07/2019 06:31:PM
MAIN_SCRIPT.jl text/x-common-lisp 6.4 KB 08/01/2019 01:23:PM
README.Rmd text/plain 15.4 KB 09/04/2019 01:27:PM
README.html application/xhtml+xml 1.1 MB 09/04/2019 01:27:PM
README.md text/x-web-markdown 15.4 KB 09/04/2019 01:27:PM
RESULTS.jl text/x-matlab 37.3 KB 09/04/2019 03:32:PM
adaptive_grid.jl text/x-matlab 2.1 KB 07/27/2019 02:14:PM

Project Citation: 

Rudik, Ivan. Data and Code for: Optimal climate policy when damages are unknown. Nashville, TN: American Economic Association [publisher], 2025. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2020-04-24. https://doi.org/10.3886/E111185V1

Project Description

Summary:  View help for Summary 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 develop recursive IAM frameworks to model uncertainty, learning, and concern for misspecification about damages. I decompose the carbon tax into channels capturing state uncertainty, insurance motives, and precautionary saving. Damage learning improves ex ante welfare by $750 billion. If damage functions are misspecified and omit the potential for catastrophic damages, robust control may be beneficial ex post.

Scope of Project

Subject Terms:  View help for Subject Terms climate change; damages; social cost of carbon
JEL Classification:  View help for JEL Classification
      H23 Externalities • Redistributive Effects • Environmental Taxes and Subsidies
      Q54 Climate • Natural Disasters and Their Management • Global Warming
      Q58 Government Policy
      Q58
Geographic Coverage:  View help for Geographic Coverage Global
Time Period(s):  View help for Time Period(s) 1/1/2005 – 1/1/2205 (Simulations cover 2005-2105 or 2005-2205.)
Data Type(s):  View help for Data Type(s) other


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V1 [2020-04-24]

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