Titre

Risk Aversion, Intergenerational Equity and Climate Change

Année de publication

2004

Source

Environmental and Resource Economics 2004 28 195 207 2

ISSN
0924-6460
Résumé

Abstract: The paper investigates a climate-economy model with an iso-elastic welfare function in which one parameter γ measures relative risk-aversion and a distinct parameter ρ measures resistance to intertemporal substitution.We show both theoretically and numerically that climate policy responds differently to variations in the two parameters. In particular, we show that higher γ but lower ρ leads to increase emissions control. We also argue that climate-economy models based on intertemporal expected utility maximization, i.e. models where γ = ρ, may misinterpret the sensitivity of the climate policy to risk-aversion.

Type de publication
  • journal
Type de document
  • research-article
Classification
 
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