title: Bounded uncertainty and climate change economics.
abstract: It has been argued recently that the combination of risk aversion and an uncertainty distribution of future temperature change with a heavy upper tail invalidates mainstream economic analyses of climate change policy. A simple model is used to explore the effect of imposing an upper bound on future temperature change. The analysis shows that imposing even a high bound reverses the earlier argument and that the optimal policy, as measured by the willingness to pay to avoid climate change, is relatively insensitive to this bound over a wide range.
authors.affiliation: Donald Bren School of Environmental Science and Management, University of California, Santa Barbara, CA 93106, USA.
authors.forename: Christopher J
authors.initials: CJ
authors.lastname: Costello
authors.forename: Michael G
authors.initials: MG
authors.lastname: Neubert
authors.forename: Stephen A
authors.initials: SA
authors.lastname: Polasky
authors.forename: Andrew R
authors.initials: AR
authors.lastname: Solow
mesh_terms: D057231:Climate Change / Q000191:economics*; D035501:Uncertainty
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