Climate economics support for the UN climate targets

Thomas Sterner and colleagues have published a Nature Climate Change paper ‘Climate economics support for the UN climate targets’. Link

We explore the effect of a number of updates and modifications to the Nobel laureate William Nordhaus’s DICE – model.

We use an alternative damage function that Peter Howard and I published in the journal Environmental and Resource Economics 2 years ago. We also use a carbon cycle based on the FAIR model and update the energy balance model. These changes actually make it possible to emit more carbon before reaching the 2C level. When it comes to discounting, we draw on a new survey of some 170 expert views on the key discounting parameters delta and eta. There are a couple more modifications such as concerning non-CO2 forces and the availability of net negative emission technologies.

With these modifications, limiting global warming to <2C becomes economically optimal. We take a median view of the experts surveyed for discounting, but also with Nordhaus discounting parameters limiting to 2C is optimal due to the other modifications made.

I think this paper may have quite a big impact and hope you will find it interesting. Since I am anResources for the Future ( RFF) fellow I would love to have this somehow “noticed” at RFF. We could retrospectively make it a working paper or perhaps do a blog or something in RESOURCES – in case you are interested and find it appropriate.

Very sincerely

New article published in Nature Climate Change

It started with that William Nordhaus was awarded the Sveriges Riksbank Prize in Economic Sciences for his DICE model, which concludes that it is economically optimal to limit global warming to 3,5 degrees Celsius. According to the UN Paris Agreement, countries committed to limiting global warming to well below 2 °C and to actively pursue a 1.5 °C limit. These targets are, according to Nordhaus’s model, economically sub-optimal.

In a new article published in Nature Climate Change, Thomas Sterner together with researchers from among others Germany, Norway, USA and the UK show that the UN climate targets may be optimal even in the DICE model when appropriately updated. You can read the article here.

The article has gotten a fair share of attention both in Sweden and internationally, some of the media coverage is listed below.

En ambitiös klimatpolitik är samhällsekonomiskt lönsam“, Chalmers University press release. 2020-07-14.
An ambitious climate policy is economically beneficial“, Mirage. 2020-07-14.
Två graders uppvärmning ekonomiskt optimalt enligt ny forskning“, Sveriges Radio Vetenskapsnyheter. 2020-07-13.
Nobelpristagare räknade fel, enligt ny forskning“, Svenska Dagbladet. 2020-07-13.
Tuffa klimatåtgärder är bra för ekonomin“, Göteborgs Posten. 2020-07-13.
Der wohltemperierte Klimaschutz UN-Klimaschutzziel liegt nahe am Kosten-Nutzen-Optimum“, Der Tagesspiegel. 2020-07-13.