An official website of the United States government.

We've made some changes to EPA.gov. If the information you are looking for is not here, you may be able to find it on the EPA Web Archive or the January 19, 2017 Web Snapshot.

Working Paper: Moving Forward with Incorporating “Catastrophic” Climate Change into Policy Analysis

Paper Number: 2013-01

Document Date: 01/2013

Author(s): Elizabeth Kopits, Alex L. Marten, Ann Wolverton

Subject Area(s): Climate Change

JEL Classification: Environmental Economics: Climate; Natural Disasters and Their Management; Global Warming; Government Policy

Keywords: climate change; catastrophes; integrated assessment model

Abstract: It has often been stated that current studies aimed at understanding the magnitude of optimal climate policy fail to adequately capture the potential for “catastrophic” impacts of climate change. While economic modeling exercises to date do provide evidence that potential climate catastrophes might significantly influence the optimal path of abatement, there is a need to move beyond experiments which are abstracted from important details of the climate problem in order to substantively inform the policy debate.

This paper provides a foundation for improving the economic modeling of potential large scale impacts of climate change in order to understand their influence on estimates of socially efficient climate policy. We begin by considering how the term “catastrophic impacts” has been used in the scientific literature to describe changes in the climate system and carefully review the characteristics of the events that have been discussed in this context. We contrast those findings with a review of the way in which the economic literature has modeled the potential economic and human welfare impacts of events of this nature. We find that the uniform way in which the economic literature has typically modeled such impacts along with the failure to understand differences in the end points and timescales examined by the natural science literature has resulted in the modeling of events that do not resemble those of concern. Based on this finding and our review of the scientific literature we provide a path forward for better incorporating these events into integrated assessment modeling, identifying areas where modeling could be improved even within current modeling frameworks and others where additional work is needed.

Published: Kopits, Elizabeth, Alex L. Marten, and Ann Wolverton. 2013. "Incorporating ‘catastrophic’climate change into policy analysis," Climate Policy 14(5): 637-664.

This paper is part of the Environmental Economics Working Paper Series.

You may need a PDF reader to view some of the files on this page. See EPA’s About PDF page to learn more.