Paris Climate Agreement Analysis
The DJO`s estimates have accelerated research on how to model the impact of growth on climate policy assessment. There are many channels that allow climate change to influence economic development. In addition to direct reductions in output, which will produce greater effects such as reduced investment and hence strong economic growth, climate change can also influence research progress and slow growth in overall factor productivity (TFP) or accelerate the devaluation of capital stock. van Vuuren, D. P. et al. How do integrated assessment models simulate climate change? Amendment 104, 255-285 (2011). “A safer, safer, more prosperous and freer world.” In December 2015, President Barack Obama envisioned leaving today`s children when he announced that the United States, along with nearly 200 other countries, had committed to the Paris Climate Agreement, an ambitious global action plan to combat climate change. Although, based on the same data set, different model specifications can result in significant discrepancies in estimates. Given that damage cost estimates are very important for the optimal policy solution for IAMs, it is not surprising that our results respond to these model specifications.
However, given that three out of four model specifications imply an economically optimal temperature target of 2oC or less for a climate sensitivity of 2.9oC, we believe that our results are relatively robust compared to the different specifications of the BHM model. To date, BHM estimates have been shown to be consistent with the relatively high social cost of carbon9, indicating that emission reductions should be severe. However, the impact on optimal policies was assessed only on the basis of pre-defined scenarios of warming and economic growth6,8,9,10. While such estimates are not without criticism, it is natural and necessary to compare them with climate change mitigation costs (mitigation costs, below) using an Integrated Assessment Model (IAM). IAm are the different dynamic interactions between the economy and the climate12,13. Below, we submit our results to numerous robustness tests. First, we add to the climate change sensitivity analysis in the main text by taking into account a total probability density function for ECS values. Second, we look at the effects of uncertainty in BHM`s estimates.
In this regard, we take into account other estimates of 1 and 2, on the one hand, and different model specifications, on the other. This analysis is followed by a comparison with the DJO estimates. Third, we study the influence of uncertainty on the socio-economic future by recalibrate the DICE model based on a selected group of SSPs. As a by-product of this calibration, we obtain mitigation and cost functions that emulate the costs of a detailed process model and thus represent a further evolution of the DICE model. The derivation of these functions allows us to test the sensitivity of our results to these alternative emission reduction costs. We complete this section by providing more information on the robustness test for the preferred parameters shown in the main text. Taking part in an election campaign promise, Trump – a climate denier who has claimed that climate change is a “hoax” perpetrated by China, announced in June 2017 his intention to withdraw the United States from the Paris Agreement.