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Tail-effect and the role of greenhouse gas emissions control
( In Chang Hwang ) , ( Richard S. J. Tol ) , ( Marjan W. Hofkes )
UCI I410-ECN-0102-2018-300-003996956

This paper investigates the role of emissions control on reducing the effect of fat-tailed uncertainty about climate change. Through a simple analysis on temperature distributions and some numerical simulations using the well-known Dynamic Integrated model of Climate and the Economy (DICE model), we find that the option for emissions control effectively prevents the tail-effect. Climate policy based on hyperbolic absolute risk aversion (HARA) utility is less sensitive to fat tails than climate policy based on constant relative risk aversion (CRRA) utility.

[자료제공 : 네이버학술정보]
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