Climate Policy under Spatial Heat Transport: Cooperative and Noncooperative Regional Outcomes
We build a novel stochastic dynamic regional integrated assessment model (IAM) of the climate and economic system including a number of important climate science elements that are missing in most IAMs. These elements are spatial heat transport from the Equator to the Poles, sea level rise, permafros...
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ftrepec:oai:RePEc:arx:papers:1909.04009 2024-04-14T08:18:16+00:00 Climate Policy under Spatial Heat Transport: Cooperative and Noncooperative Regional Outcomes Yongyang Cai William Brock Anastasios Xepapadeas Kenneth Judd http://arxiv.org/pdf/1909.04009 unknown http://arxiv.org/pdf/1909.04009 preprint ftrepec 2024-03-19T10:25:48Z We build a novel stochastic dynamic regional integrated assessment model (IAM) of the climate and economic system including a number of important climate science elements that are missing in most IAMs. These elements are spatial heat transport from the Equator to the Poles, sea level rise, permafrost thaw and tipping points. We study optimal policies under cooperation and noncooperation between two regions (the North and the Tropic-South) in the face of risks and recursive utility. We introduce a new general computational algorithm to find feedback Nash equilibrium. Our results suggest that when the elements of climate science are ignored, important policy variables such as the optimal regional carbon tax and adaptation could be seriously biased. We also find the regional carbon tax is significantly smaller in the feedback Nash equilibrium than in the social planner's problem in each region, and the North has higher carbon taxes than the Tropic-South. Report permafrost RePEc (Research Papers in Economics) Nash ENVELOPE(-62.350,-62.350,-74.233,-74.233) |
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RePEc (Research Papers in Economics) |
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description |
We build a novel stochastic dynamic regional integrated assessment model (IAM) of the climate and economic system including a number of important climate science elements that are missing in most IAMs. These elements are spatial heat transport from the Equator to the Poles, sea level rise, permafrost thaw and tipping points. We study optimal policies under cooperation and noncooperation between two regions (the North and the Tropic-South) in the face of risks and recursive utility. We introduce a new general computational algorithm to find feedback Nash equilibrium. Our results suggest that when the elements of climate science are ignored, important policy variables such as the optimal regional carbon tax and adaptation could be seriously biased. We also find the regional carbon tax is significantly smaller in the feedback Nash equilibrium than in the social planner's problem in each region, and the North has higher carbon taxes than the Tropic-South. |
format |
Report |
author |
Yongyang Cai William Brock Anastasios Xepapadeas Kenneth Judd |
spellingShingle |
Yongyang Cai William Brock Anastasios Xepapadeas Kenneth Judd Climate Policy under Spatial Heat Transport: Cooperative and Noncooperative Regional Outcomes |
author_facet |
Yongyang Cai William Brock Anastasios Xepapadeas Kenneth Judd |
author_sort |
Yongyang Cai |
title |
Climate Policy under Spatial Heat Transport: Cooperative and Noncooperative Regional Outcomes |
title_short |
Climate Policy under Spatial Heat Transport: Cooperative and Noncooperative Regional Outcomes |
title_full |
Climate Policy under Spatial Heat Transport: Cooperative and Noncooperative Regional Outcomes |
title_fullStr |
Climate Policy under Spatial Heat Transport: Cooperative and Noncooperative Regional Outcomes |
title_full_unstemmed |
Climate Policy under Spatial Heat Transport: Cooperative and Noncooperative Regional Outcomes |
title_sort |
climate policy under spatial heat transport: cooperative and noncooperative regional outcomes |
url |
http://arxiv.org/pdf/1909.04009 |
long_lat |
ENVELOPE(-62.350,-62.350,-74.233,-74.233) |
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Nash |
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Nash |
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permafrost |
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permafrost |
op_relation |
http://arxiv.org/pdf/1909.04009 |
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1796317716734279680 |