Dundee Discussion Papers in Economics 236: Global warming and extreme events: rethinking the timing and intensity of environmental policy

Yu-Fu Chen; Michael Funke

Dundee Discussion Papers in Economics 236: Global warming and extreme events: rethinking the timing and intensity of environmental policy

Yu-Fu Chen
, Michael Funke

Research output: Working paper/Preprint › Discussion paper

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Abstract

The possibility of low-probability extreme events has reignited the debate over the optimal intensity and timing of climate policy. In this paper we therefore contribute to the literature by assessing the implications of low-probability extreme events on environmental policy in a continuous-time real options model with “tail risk”. In a nutshell, our results indicate the importance of tail risk and call for foresighted pre-emptive climate policies.

Original language	English
Publisher	University of Dundee
Publication status	Published - 2010

Publication series

Name	Dundee Discussion Papers in Economics
Publisher	University of Dundee
No.	236
ISSN (Print)	1473-236X

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 13 Climate Action

Keywords

Climate policy
Extreme events
Real options
Levy process

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DDPE_236.pdf

Cite this

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abstract = "The possibility of low-probability extreme events has reignited the debate over the optimal intensity and timing of climate policy. In this paper we therefore contribute to the literature by assessing the implications of low-probability extreme events on environmental policy in a continuous-time real options model with “tail risk”. In a nutshell, our results indicate the importance of tail risk and call for foresighted pre-emptive climate policies.",

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Dundee Discussion Papers in Economics 236: Global warming and extreme events: rethinking the timing and intensity of environmental policy

Abstract

Publication series

UN SDGs

Keywords

Access to Document

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Cite this