Grantham Seminar – “Integrated Assessment of Climate Change under Uncertainty”

24 April, 2015 12:30 pm - 2:00 pm
Professor Christian Traeger
Tower 2, Room 9.05, LSE, Clement's Inn, London, WC2A 2AZ

Christian Traeger, Assistant Professor at the Department of Agricultural & Resource Economics, UC Berkeley, will be the speaker for this seminar.

Abstract from Christian’s paper: “Analytic Integrated Assessment and Uncertainty”

I develop an analytic integrated assessment model of climate change. The paper closes a gap between complex numeric models used in policy advising and stylized models built for analytic insight. The model contains an explicit carbon cycle, the CO2 radiative forcing equation, and a model of atmosphere-ocean temperature dynamics. Economic production relies on various clean and dirty, and potentially scarce energy sources. I derive a closed-form solution of the optimal carbon tax and the welfare implications from uncertainty over the carbon cycle and the climate’s sensitivity to CO2. I discuss unforeseen persistent shocks to the system (vector autoregressive uncertainty) as well as epistemological uncertainty such as a Bayesian learning. The analysis employs non-logarithmic risk attitude and distinguishes risk aversion from a decision maker’s propensity to smooth consumption over time.

Download the full paper

Further information on Professor Traeger and his research interests can be found here.

Save this event to your calendar:
- add to Google Calendar
- add to Yahoo Calendar
- add to Outlook.com Calendar
or download for iCal / Outlook