Fat-Tailed Uncertainty in the Economics of Catastrophic Climate Change

2011/07/01 by Martin L. Weitzman · 5 citations
Economics, Econometrics and Finance · Energy · Environmental Science · #Climate Change Policy and Economics #Global Energy and Sustainability Research #Sustainable Development and Environmental Policy

paper · doi:10.1093/reep/rer006

openalex publication_date 2011/07/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/16

Abstract

In this article, I revisit some basic issues concerning structural uncertainty and catastrophic climate change. My target audience here are general economists, so this article could also be viewed as a somewhat less technical exposition that supplements my previous work. Using empirical examples, I argue that it is implausible that low-probability, high-negative impact events would not much influence an economic analysis of climate change. I then try to integrate the empirical examples and the theory together into a unified package with a unified message that the possibility of catastrophic climate change needs to be taken seriously.

Citations

• A Review of the Stern Review on the Economics of Climate Change
• An adaptability limit to climate change due to heat stress
• Atmospheric Lifetime of Fossil Fuel Carbon Dioxide
• Target atmospheric CO2: Supporting material

Cited by

• The Use and Misuse of Models for Climate Policy
• Climate mitigation policy as a system solution: addressing the risk cost of carbon
• Climate Action to Unlock the Inclusive Growth Story of the 21st Century
• Health and climate change: policy responses to protect public health
• William Nordhaus [wikipedia]