This study explores the reduction potential of greenhouse gases for major pollution emitting countries of the world using nonparametric productivity measurement methods and directional distance functions. In contrast to the existing literature we apply optimization methods to endogenously determine optimal directions for the efficiency analysis. These directions represent the compromise of outp...

Annual global CO2 emission forecasts at 2100 span 10 to 40 billion tonnes. Modeling work over the past decade has not narrowed this range nor provided much guidance about probabilities. We examine the time-series properties of historical per capita CO2 emissions and conclude that per capita global emissions are stationary without trend, and have a constant mean of 1.14 tonnes per person with st...

This paper applies the concept of damage coefficients introduced in Houba and Kremers (2008) to provide an estimate of the cost of climate change in particular the cost of changes in mean regional temperature and precipitation to the fruit vegetation sector. We concentrate on the production of apples in the German ‘Alte Land’ region. The estimated cost of climate change on apple-growing in the ...

This study links a multi-sectoral regionalized dynamic computable general equilibrium model of Ethiopia with a system of country-specific hydrology, crop, road and hydropower engineering models to simulate the economic impacts of climate change towards 2050. In the absence of externally funded policy-driven adaptation investments Ethiopia’s GDP in the 2040s will be up to 10 percent below the co...

One channel through which environment is damaged is consumption. To protect environment, various product standards are introduced all over the world. By using a new economic geography framework, this paper explores the effects of environmental product standards on environment in a North-South trade model. We examine a situation in which North unilaterally introduces an environmental product sta...

We explore heat-related labor impacts both for their own interest and to understand the role of adaptation in responding to climate change. Focusing on non-agricultural sectors in the United States, we find that hot temperatures exert a causal negative impact on county-level payroll – reducing payroll by several percentage points in a 2◦C hotter year – with larger impacts in highly exposed indu...

We consider the climate-policy implications of non-constant time preferences when there is no commitment to future policies. The conceptual and quantitative results follow from the observation that, with time-declining discounting, the unusual delays and persistence of climate impacts provide a commitment device for climate policy-makers, overturning a fundamental climate-policy conclusion from...

When politicians negotiate in international climate conventions they may suffer from incomplete information about each other’s preferences about reaching an agreement. As is known, this may cause failure to reach an efficient cooperative agreement. We study the role of the clean development mechanism (CDM) for the likelihood of such failure. The CDM has been introduced in the context of the Kyo...

We investigate the optimal policy response to the possibility of abrupt, irreversible shifts in system dynamics. The welfare cost of a tipping point emerges from the policymaker’s response to altered system dynamics. Our policymaker also learns about a threshold’s location by observing the system’s response in each period. Simulations with a recursive, numerical climate-economy model show that ...

We analyze the policy implications of aversion to Knightian uncertainty (or ambiguity) about the possibility of tipping points. We demonstrate two channels through which uncertainty aversion affects optimal policy in the general setting. The first channel relates to the policy’s effect on the probability of tipping, and the second channel to its differential impact in the preand post-tipping re...