Inside the Integrated Assessment Models: Four Issues in Climate Economics
Good climate policy requires the best possible understanding of how climatic change will impact on human lives and livelihoods in both industrialized and developing counties. Our review of recent contributions to the climate-economics literature assesses 30 existing integrated assessment models in four key areas: the connection between model structure and the type of results produced; uncertainty in climate outcomes and projection of future damages; equity across time and space; and abatement costs and the endogeneity of technological change. Differences in treatment of these issues are substantial and directly affect model results and their implied policy prescriptions. Much can be learned about climate economics and modelling technique from the best practices in these areas; there is unfortunately no existing model that incorporates the best practices on all or most of the questions we examine.