Climate Change Policy: What Do the Models Tell Us?
2013/09/01 by Robert S Pindyck, Robert S. Pindyck · 948 citations
Economics, Econometrics and Finance · Environmental Science · #Climate Change Policy and Economics #Climate change #Climate model #Climate policy #Computer science #Ecology #Econometrics #Economic and Environmental Valuation #Economics #Epistemology #Foundation (evidence) #Geography #Nothing #Perception #Sustainable Development and Environmental Policy
paper · doi:10.1257/jel.51.3.860
published in Journal of Economic Literature 51(3), 860-872 (American Economic Association)
openalex publication_date 2013/09/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/29
Abstract
Very little. A plethora of integrated assessment models (IAMs) have been constructed and used to estimate the social cost of carbon (SCC) and evaluate alternative abatement policies. These models have crucial flaws that make them close to useless as tools for policy analysis: certain inputs (e.g., the discount rate) are arbitrary, but have huge effects on the SCC estimates the models produce; the models' descriptions of the impact of climate change are completely ad hoc, with no theoretical or empirical foundation; and the models can tell us nothing about the most important driver of the SCC, the possibility of a catastrophic climate outcome. IAM-based analyses of climate policy create a perception of knowledge and precision, but that perception is illusory and misleading. (JEL C51, Q54, Q58)
Citations
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