The value of information for integrated assessment models of climate change

We estimate the value of information (VOI) for three key parameters of climate integrated assessment models (IAMs): marginal damages at low temperature anomalies, marginal damages at high temperature anomalies, and equilibrium climate sensitivity. Most empirical studies of climate damages have exami...

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Veröffentlicht in:Journal of environmental economics and management 2014-07, Vol.68 (1), p.111-123
Hauptverfasser: Newbold, Stephen C., Marten, Alex L.
Format: Artikel
Sprache:eng
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Zusammenfassung:We estimate the value of information (VOI) for three key parameters of climate integrated assessment models (IAMs): marginal damages at low temperature anomalies, marginal damages at high temperature anomalies, and equilibrium climate sensitivity. Most empirical studies of climate damages have examined temperature anomalies up to 3°C, while some recent theoretical studies emphasize the risks of “climate catastrophes,” which depend on climate sensitivity and on marginal damages at higher temperature anomalies. We use a new IAM to estimate the VOI for each parameter over a range of assumed levels of study precision based on prior probability distributions calibrated using results from previous studies. We measure the VOI as the maximum fixed fraction of consumption that a social planner would be willing to pay to conduct a new study before setting a carbon tax. Our central results suggest that the VOI is greatest for marginal damages at high temperature anomalies.
ISSN:0095-0696
1096-0449
DOI:10.1016/j.jeem.2014.01.002