The Paris climate agreement aims to keep temperature rises well below 2 degrees Celsius. This involves mitigation and prevention costs for climate damage. Here we show that the agreement is the economically optimal political path for the century, regardless of normative assumptions of inequality aversion and temporal preferences. To this end, we systematically integrate a cost-damage curve that replicates the observed ratio of temperature to economic growth in the DICE integrated assessment model. We thus offer an inter-temporally optimized cost-benefit analysis of the climate problem of this century. We take into account uncertainties regarding the damage curve, sensitivity to climate change, socio-economic future and mitigation costs. The resulting optimal temperature is robust, as can be understood based on the overall temperature of mitigation costs and the level of damage resulting from the observed temperature-growth relationship. Our results show that the politically motivated Paris climate agreement is also an economically advantageous route if properly implemented. While formal adherence to the agreement is simple, the biggest challenge for a Biden administration would be to present a new U.S.
NDC, widely seen as ambitious and credible. Before iteration, we solve the climate-free model in order to maintain the “s_t” mathrm “nocc” investment rate optimally if there is no climate change. His view on the Paris agreement was that it was unfair to the United States, so countries like India and China were free to use fossil fuels while the United States had to reduce its carbon. Unlike Moore and Diaz47, as well as Lemoine and Kapnick7, the estimates we use for the evolution of damage function come from recent empirical work in the BHM study, which represents a non-linear temperature-growth ratio. The formal withdrawal has also reopened old wounds for climate diplomats. Rose, S. K., Diaz, D.B. – Blanford, G. J. Understanding the social cost of carbon: a model diagnosis and inter-comparison study. I`m Alim Chang. 08, 1750009 (2017).
Uncertainty in the estimates of 1 and 2 in Eq. (2) to quantify, Burke et al.8 implement boottraping strategies based on samples by country, after one year and five years. They draw by country, selecting a selection of third countries from their list of 165 countries, 165 countries in total and re-evaluate the response function with that amount. This sampling method allows for a correlation in residues within countries over time. Similarly, they repeat over the years and blocks of 5 years, allowing a cross-sectional correlation in the residues in a given year and for the temporal and transverse dependence in the residues. The resulting distribution of economically optimal temperatures in 2100 inherits the properties of the distribution of the probabilities of the ECS. As the main text shows, higher ECS values imply a higher temperature target because of the limited room for manoeuvre to achieve lower temperatures with climate policy. In addition, the more detailed sensitivity analysis confirms that the most likely temperature targets are 2oC. Nevertheless, there is a certain probability, although very low, that the economically optimal temperature target may be significantly higher, perhaps up to 4oC.