Cumulative carbon emissions and economic policy: in search of general principles
In this research Dietz and Venmans exploit recent advances in climate science to develop a physically consistent, yet surprisingly simple, model of climate policy.
It seems that most economic models have greatly overestimated the delay between carbon emissions and warming, and ignored the saturation of carbon sinks. This has important implications for climate policy. If carbon emissions are abated, damages are avoided almost immediately. Therefore it is optimal to reduce emissions significantly in the near term and bring about a slow transition to optimal peak warming, even if optimal steady-state/peak warming is high. The optimal carbon price should start relatively high and grow relatively fast.
This paper updates earlier versions published in November 2017 and March 2018.