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

Yu-Fu Chen, Michael Funke, Nicole Glanemann

    Research output: Working paper/PreprintDiscussion paper

    Abstract

    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.
    Original languageEnglish
    PublisherUniversity of Dundee
    Number of pages28
    Publication statusPublished - Dec 2011

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.262
    ISSN (Print)1473-236X

    Keywords

    • Climate policy
    • CO2
    • Scenarios
    • non-perpetual real options

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