Wisdom of the experts: Using survey responses to address positive and normative uncertainties in climate-economic models
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Wisdom of the experts: Using survey responses to address positive and normative uncertainties in climate-economic models Peter Harrison Howard 1
& Derek Sylvan
1
Received: 11 July 2019 / Accepted: 14 June 2020/ # Springer Nature B.V. 2020
Abstract
The social cost of carbon (SCC) and the climate-economic models underlying this prominent US climate policy instrument are heavily affected by modeler opinion and therefore may not reflect the views of most climate economists. To test whether differences exist, we recalibrate key uncertain model parameters using formal expert elicitation: a multi-question online survey of individuals who have published scholarship on the economics of climate change, with 165 to 216 respondents, depending on the question. Survey questions on the magnitude of climate impacts and appropriate discount rates revealed that prevailing views differ from prominent IAMs, including DICE. We calibrate the DICE damage functions and discount rates to reflect the mean and median survey responses, respectively, recognizing these two parameters’ differing sources of uncertainty (positive versus normative). We find a 16-fold higher SCC than the base DICE-2013R assumptions, with a range of 11- to 24-fold under alternative modeling assumptions (using the DICE-2016R2 model version and calibrating damages to median rather than mean responses). Our findings support a 7- to 13-fold SCC increase for different respondent subgroups even when we exclude the potential for catastrophic climate impact shocks. Our results reveal a significant disparity between IAMs and the broader community of scholars publishing in this field. Keywords Social cost of carbon (SCC) . Climate-economic models . IAMs . Expert elicitation
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10584-02002771-w) contains supplementary material, which is available to authorized users.
* Peter Harrison Howard [email protected]
1
Institute for Policy Integrity at New York University School of Law, New York, NY, USA
Climatic Change
1 Introduction The social cost of carbon (SCC)—the marginal external damage caused by a unit of CO2 emissions—is a critical policy tool for evaluating greenhouse gas (GHG) emission reductions in the USA and elsewhere. A 2007 US federal court ruling required executive branch agencies to use the SCC in cost-benefit analyses of major regulations affecting GHG emissions, making the SCC an essential number in US government policymaking. The SCC is estimated using Integrated Assessment Models (IAMs), which capture the various steps in the climate and economic processes that translate a marginal unit of CO2 emissions into an economic damage. As such, IAMs are interdisciplinary models informed by the natural and social sciences, with many model components outside of most economists’ expertise. Given the significant uncertainties—both positive and normative—that society faces with respect to climate change, it should be unsurprising that each of the steps in these mod
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