TY  - UNPD
A1  - Hambel, Christoph
A1  - Kraft, Holger
A1  - Schwartz, Eduardo S.
T1  - Optimal carbon abatement in a stochastic equilibrium model with climate change
T2  - SAFE working paper series ; No. 92
N2  - This paper studies a dynamic stochastic general equilibrium model involving climate change. Our model allows for damages on economic growth resulting from global warming. In the calibration, we capture effects from climate change and feedback effects on the temperature dynamics. We solve for the optimal state-dependent abatement policy. In our simulations, the costs of this policy measured in terms of lost GDP growth are moderate. On the other hand, postponing abatement action could reduce the probability that the climate can be stabilized. For instance, waiting for 10 years reduces this probability from 60% to 30%. Waiting for another 10 years leads to a probability that is less than 10%. Finally, doing nothing opens the risk that temperatures might explode and economic growth decreases significantly.
T3  - SAFE working paper - 92 
KW  - Climate change economics
KW  - Carbon abatement
KW  - GDP growth
Y1  - 2015
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/37193
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-371935
UR  - http://ssrn.com/abstract=2579694
IS  - This version: March 21, 2015
PB  - SAFE
CY  - Frankfurt am Main
ER  -