Uncertainty and climate change policy design

Warwick McKibbin, Peter Wilcoxen

    Research output: Contribution to journalArticle

    Abstract

    This paper argues that the problem with the targets and timetable approach to climate policy is that it ignores uncertainty about costs. An alternative approach on coordinating short run prices within a long run emissions targeting framework is outlined. A global economic model is used to demonstrate the nature of the economic uncertainty about climate policy and the gains to be achieved by equalizing carbon prices across countries. The paper also shows that although price and quantity-based systems appear to be similar they can fundamentally change the international transmission of economic shocks.
    Original languageEnglish
    Pages (from-to)463-477
    JournalJournal of Policy Modeling
    Volume31
    Issue number3
    DOIs
    Publication statusPublished - 2009

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