| Authors |
Xepapadeas, A. and Yannacopoulos, A. |
| Title |
Climate Change Policy under Spatially Structured Ambiguity: Hot Spots and the Precautionary Principle |
| Abstract |
In view of the ambiguities and the deep uncertainty associated with
climate change, we study the features of climate change policies that account
for spatially structured ambiguity. Ambiguity related to the evolution of the
natural system is introduced into a coupled economy-climate model with
explicit spatial structure due to heat transport across the globe. We seek
to answer questions about how spatial robust regulation regarding climate
policies can be formulated; what the potential links of this regulation to
the weak and strong version of the precautionary principle (PP) are; and
how insights about whether it is costly to follow a PP can be obtained. We
also study the emergence of hot spots, which are locations where local deep
uncertainty may cause robust regulation to break down for the whole spatial
domain, or the weak PP to be costly. |
| Keywords |
Ambiguity, Climate change, space, maxmin expected utility, robust control regulation, hot spots, precautionary principle |
| Classification JEL |
Q54, Q58, D81, R11 |
| File |
Climate.Change.Policy..pdf (250955 bytes) |
| File-Function |
First version |
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Copyright © 2009 [D.I.E.S.S. A.U.E.B.]. All rights reserved.
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