Dundee Discussion Papers in Economics 262: Time is running out: the 2°c target and optimal climate policies

TY - UNPB

T1 - Dundee Discussion Papers in Economics 262

T2 - Time is running out: the 2°c target and optimal climate policies

AU - Chen, Yu-Fu

AU - Funke, Michael

AU - Glanemann, Nicole

PY - 2011/12

Y1 - 2011/12

N2 - The quintessence of recent natural science studies is that the 2C target can only be achieved with massive emission reductions in the next few years. The central twist of this paper is the addition of this limited time to act into a non-perpetual real options framework analysing optimal climate policy under uncertainty. The window-of-opportunity modelling setup shows that the limited time to act may spark a trend reversal in the direction of low-carbon alternatives. However, the implementation of a climate policy is evaded by high uncertainty about possible climate pathways.

AB - The quintessence of recent natural science studies is that the 2C target can only be achieved with massive emission reductions in the next few years. The central twist of this paper is the addition of this limited time to act into a non-perpetual real options framework analysing optimal climate policy under uncertainty. The window-of-opportunity modelling setup shows that the limited time to act may spark a trend reversal in the direction of low-carbon alternatives. However, the implementation of a climate policy is evaded by high uncertainty about possible climate pathways.

KW - Climate policy

KW - CO2

KW - Scenarios

KW - non-perpetual real options

M3 - Discussion paper

T3 - Dundee Discussion Papers in Economics

BT - Dundee Discussion Papers in Economics 262

PB - University of Dundee

ER -