The Challenge of Global Warming

Economic Models and Environmental Policy

The issues involved in understanding global warming and taking policies to slow its harmful impacts are the major environmental challenge of the modern age. Global warming poses a unique mix of problems that arise from the fact that global warming is a global public good, is likely to be costly to

slow or prevent, has daunting scientific and economic uncertainties, and casts a shadow over the globe for decades, perhaps even centuries to come.

The challenge of coping with global warming is particularly difficult because it has spans many disciplines and parts of society.  Ecologists may see it as a threat to ecosystems, marine biologists as a problem arising from ocean acidification, utilities as a debit to their balance sheets, and coal miners as an existential threat to their livelihood. Businesses may view global warming as either an opportunity or a hazard, politicians as a great issue as long as they don’t need to mention taxes, ski resorts as a mortal danger to their alreadyshort seasons, golfers as a boon to year-round recreation, and poor countries as a threat to their farmers as well as a source of financial and technological aid.

This many-faceted nature also raises challenges to natural and social scientists, who must incorporate a wide variety of geophysical, economic, and political disciplines in their diagnoses and prescriptions.

This is the age of global warming … and of global-warming studies. The present study uses the tools of economics and mathematical modeling to analyze efficient and inefficient approaches to slowing global warming. It describes a small but comprehensive model of the economy and climate called

the DICE-2007 model, for Dynamic Integrated model of Climate and the Economy.

The current study is a completely revised version of earlier models developed by the author and collaborators to understand the economic and environmental dynamics of alternative approaches to slowing global warming.

It represents the fifth major version of modeling efforts, with earlier versions developed in the periods 1974-1979, 1980-82, 1990-1994, and 1997-2000.1 Many of the equations and details have changed over the different generations, but the basic modeling philosophy remains unchanged: to incorporate the latest economic and scientific knowledge and to capture the major elements of the

economics of climate change in as simple and transparent a fashion as is possible. The guiding philosophy is, in Leonardo’s words, that “simplicity is the highest form of sophistication.”

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For more … Just Search and Read @ http://nordhaus.econ.yale.edu/dice_mss_072407_all.pdf

Or Download @ The Challenge of Global Warming: Economic Models and Environmental