Assessment of risk and uncertainty associated with climate policy
Assessment of risk and uncertainty associated with climate policy is important to formulating appropriate responses to climate change. Viewing climate policy as a societal investment yielding uncertain returns over time, this research uses simple integrated assessment models to assess the importance of various types and levels uncertainty. Results show that, independent of the type of uncertainty about climate change, individuals possess a level of aversion to downside financial risk that leads to a rational choice of climate policy of aggressive greenhouse gas emissions reduction.
Faculty contact: Michael Gerst