Event Information
The next speaker in EEU seminar series is Peter Howard. Peter is the Economics Director at the Institute for Policy Integrity at New York University School of Law, and his recent research has focused on the social cost of carbon and integrated assessment models (website).
On Monday, 12.05-13.00 (Stockholm time), Peter will present us a working paper about climate damages. You can find the abstract below.
The seminar will take place on zoom. To access the seminar by zoom, please email ville.inkinen@economics.gu.se to get the link and password.
Abstract:
In his 2019 Nobel Prize acceptance paper, William Nordhaus (2019) highlighted the uncertainty over climate damages by using two completely different damage functions: Nordhaus and Moffat (2017) and Howard and Sterner (2017). Despite their vastly different implications for climate policies, both were estimated using the meta-analysis technique: a method long considered the objective and scientifically rigorous way for combining results from multiple studies to develop a consensus estimate. This paper demonstrates that this disparity stems from both differing methodological decisions (with respect to addressing methodological impacts and heteroscedasticity) and subjective decisions (with respect to data search, selection, and weighting). Combining the two datasets, applying Nordhaus’ quality weights, and applying the best methodological practices, we find damages of approximately 7% to 10% of GDP for a 3⁰C increase depending on the inclusion of catastrophic and productivity impacts; the result is relatively robust to alternative data selection, weighting, and methodological assumptions. However, subjective differences between the weighting assumptions of these two earlier studies are still unresolved. To address this subjectivity, this paper makes transparent existing weighting rules, develops new weighting rules, and applies a recently developed quality-effects estimator from the medical literature (Doi et al., 2015). Operationalizing these rules, we demonstrate that damages are approximately 7% to 16% of GDP for a 3°C increase, though the upper end of this range, which includes catastrophic and productivity impacts, is sensitive to the selected model and weight specification.